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Weapon System Management in a
Performance Based Logistics environment
The Role of the NL DMO Weapon System Department
Asset Management Control
International Masters School
Student: P.M.W. Spitters BSc
Supervisor: Dr. Ir. J. Stavenuiter
Supervisor: Ir. M.J.B.M. Lambrichs
Date: 20 June 2012
Weapon System Management in a
Performance Based Logistics environment
The Role of the NL DMO Weapon System Department
Master Thesis
Master of Science in
Asset Management Control
International Masters School
visor: Dr. Ir. J. Stavenuiter
.J.B.M. Lambrichs
Weapon System Management in a
Performance Based Logistics environment
The Role of the NL DMO Weapon System Department
Petrick Spitters AMC MSc
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Petrick Spitters AMC MSc
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Acknowledgement
With this Master Thesis I am completing my Master of Science in Asset Management
Control. The completion of this master thesis was an extensive effort which I could not have
completed by myself. Therefore I would like to thank everybody that supported me in this
process. First of all I would like to thank the Defense Materiel Organisation for providing me
the opportunity to follow this Master of Science course. Special thanks go out to Wil van Rijn
for starting this effort together. I would also like to thank the participants in the stakeholder
assessment, Marty van den Bersselaar, Arjan de Jong, Peter Verkoeijen, Tars Gijzen,
Marten Hendriksma and Donald Trouerbach for their views on the proposed design. I
especially would like to thank John and Henneke Stavenuiter. I would like to thank John for
his guidance and direction on my research and Henneke for the support during the course. I
would also like to thank Marcel Lambrichs for his advice and support on my research in this
very busy time in the F-16 Replacement project. Very special thanks to my family and
specifically Conny, Ivar and Yari for their support. Without the encouragement and patience
of Conny this Master Thesis would never have been completed.
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Abstract The Netherlands Ministry of Defence (NL MOD) uses highly complex weapon system in
support of its armed forces. One category of these complex weapon systems are air-based
weapon systems. The sustainment of these weapon systems is cost intensive. One of the
materiel logistic processes is weapon system management (WSM), which intends to sustain
a weapon system in de most cost-effective way. Performance Based Logistics (PBL) is a
new system support concepts for air-based weapon systems in the NL MOD. The promise of
PBL, higher performance and lower life cycle costs, makes this system support concept
interesting. Future weapon systems, e.g. the Joint Strike Fighter (JSF), are supported by
PBL.
Literature indicates issues with the introduction of PBL concepts in relation to WSM. This
research is aimed at the effects of PBL might have on WSM especially from a NL DMO
perspective. The objective of this research was to provide recommendations to NL DMO for
organizing weapon system departments responsible for air-based weapon systems in a PBL
environment during the sustainment phase in order to control system cost-effectiveness. This
provided the following research question: ‘How to organize a weapon system department
within NL DMO for an air-based weapon system with a PBL support concept during the
sustainment phase capable of controlling weapon system cost-effectiveness?’
This research started with a literature and field study in order to identify issues with the
introduction of PBL concepts on WSM within the NL MOD. Various problems with the
introduction of PBL concepts and with WSM within the NL MOD are defined. The present
WSM approach limits effective control of weapon system cost-effectiveness. The WSM and
WSD organization structures do not support WSM effectively. WSM responsibility and
authority is not balanced and matched to organization functions. The WSM consultation
structure needs to be adapted to WSM in a PBL environment. Furthermore PBL affects the
required knowledge and skill to sustain effective WSM from a NL MOD perspective. Based
on the defined problems with the introduction of PBL concepts, Term of Reference (TOR) for
a future WSM organization in support of WSM in a PBL environment are defined. The TOR
state that controlling weapon system cost-effectiveness in a PBL environment requires an
Asset Management Control (AMC) approach, WSM is a PBL environment requires a
horizontal organization structure, that WSM responsibility and authority must be balanced
and assigned to one single actor, the consultation structure must be adapted to PBL and
WSM responsibility and authority and that measures must be taken to sustain WSM
knowledge to effectively manage a weapon system in a PBL environment.
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The TOR’s are tested in a case study. Because the Joint Strike Fighter (JSF) is the first air-
based weapon system with a ‘full’ PBL support concept the JSF is used as a case study. The
case study developed a conceptual design of the JSF Weapon System Management and the
associated WSM and WSD organization. WSM stakeholders assessed the conceptual
design in a SWOT analysis. The stakeholder assessment concluded that the conceptual
design needs more refinement specifically in the area of planning and risk management. The
case study revealed that the defined TOR’s are supported. AMC can be used to control
system cost-effectiveness in a PBL environment however this will require adaptation of the
LCM models used in AMC. The availability of, and insight in, cost information requires
special attention in relation to managing LCC and cost drivers. The matrix organization
structure can support WSM in a PBL environment. The proposed structuring of WSM
responsibility and authority to the Operational Commander (OPCO) might find limited support
within the NL DMO. The international environment in which JSF WSM takes place adds to
the organization and management complexity of WSM and requires coordination with
international weapon system management organization.
This research comes to following conclusions:
• Controlling cost-effectiveness in a PBL product support construct requires approaches
like AMC for effective WSM over the total life cycle of the weapon system in order to
minimize risks (i.e. weapon system effectiveness and LCC) for the NL MOD.
• A matrix organization structure consisting of the WSM actors is required to effectively
support Weapon System Management within the NL MOD.
• WSM responsibility and authority need to be balanced and assigned to one single entity,
the OPCO.
• The WSM consultation structure needs to incorporate the Product Support Integrator
(PSI) and needs to be adapted to the structuring of WSM responsibility and authority.
• Effective WSM requires knowledge of PBL, the weapon system, its utilization and logistic
support. WSM knowledge can sustained by organizing WSM in cross-functional teams
(matrix organization), participating in weapon system logistic support organization,
obtaining PBL knowledge and experience in an early stage and executing depot level
maintenance activities.
With regards to the research question the main conclusion is that the role of the Weapon
System Departments is to set and maintain the technical system framework as the Military
Type Certificate Holder as related to the airworthiness of the weapon system, and to provide
weapon system technical knowledge in the WSM matrix organization structure.
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Table of Contents
Acknowledgement .................................................................................................................. ii
Abstract ................................................................................................................................. iv
1 Introduction ........................................................................................................................ 1
1.1 Performance Based Logistics ................................................................................. 1
1.2 Weapon System Management within NL DMO ...................................................... 2
1.3 Weapon System Cost-Effectiveness ...................................................................... 3
1.4 Problem Indication ................................................................................................. 5
1.5 Objective and Research Question .......................................................................... 7
2 Research Method ........................................................................................................... 8
2.1 Introduction ............................................................................................................ 8
2.2 Research Scope .................................................................................................... 8
2.3 Research Approach ............................................................................................... 9
2.4 Research Model ....................................................................................................11
3 Literature review and field study ....................................................................................12
3.1 Introduction ...........................................................................................................12
3.2 Performance Based Logistics ................................................................................12
3.3 Asset Management Control ...................................................................................16
3.4 Organization Theory .............................................................................................19
3.5 NL MOD WSM Field Study....................................................................................24
3.5.1 MOD policy, requirements and procedures .......................................................24
3.5.2 WSM Characteristics and the NL DMO Organization ........................................30
4 Problem Definition .........................................................................................................32
4.1 Introduction ...........................................................................................................32
4.2 Analysis ................................................................................................................32
4.2.1 Controlling Weapon System Cost-Effectiveness ...................................................32
4.2.1.1 Weapon System Cost-Effectiveness in PBL ..................................................32
4.2.1.2 WSM Production Process ..............................................................................36
4.2.1.3 Analysis and Control Tools ............................................................................38
4.2.2 WSM organization structure ..................................................................................40
4.2.2.1 LCM Team ....................................................................................................40
4.2.2.2 Contingency factors .......................................................................................41
4.2.2.3 Organization Structure ..................................................................................43
4.2.3 WSM Responsibility and Authority ........................................................................44
4.2.4 WSM Core Competence .......................................................................................46
4.2.5 WSM Organization Culture ...................................................................................47
4.2.6 WSD Organization ................................................................................................49
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4.3 Problem Specification ...........................................................................................50
4.4 Terms of Reference ..............................................................................................52
5 Design ...........................................................................................................................56
5.1 Introduction ...........................................................................................................56
5.2 Organizing F-35 WSM ...........................................................................................57
5.2.1 Get Organized ...................................................................................................57
5.2.1.1 F-35 Air Vehicle (AV) Functional Breakdown Structure .................................57
5.2.1.2 Logistic Process Structure .............................................................................58
5.2.1.3 F-35 LCM Team ............................................................................................59
5.2.1.4 Information and Communication ....................................................................60
5.2.2 Get Oriented .....................................................................................................65
5.2.3 Get Practiced ....................................................................................................67
5.2.4 Get Real ............................................................................................................69
5.2.5 Get Across ........................................................................................................71
5.2.6 Get Grip ............................................................................................................72
5.3 NL F-35 WSM organization ...................................................................................74
5.3.1 Design Pre-Conditions ......................................................................................74
5.3.2 NL F-35 WSM concept and process ..................................................................76
5.3.2.1 NL F-35 WSM concept ..................................................................................76
5.3.2.2 NL F-35 WSM process ..................................................................................78
5.3.3 NL F-35 WSM organizational functions .............................................................79
5.3.4 WSM organization structure ..............................................................................80
5.4 Organizing the F-35 WSD .....................................................................................84
5.5 Stakeholder Design Assessment...........................................................................90
5.5.1 Approach ..............................................................................................................90
5.5.2 Results ..................................................................................................................90
5.5.2.1 WSM design SWOT analysis .............................................................................90
5.5.2.2 WSD design SWOT analysis .............................................................................92
6 Conclusions and Recommendations .............................................................................93
6.1 Conclusions ..........................................................................................................93
6.2 Recommendations ................................................................................................95
Bibliography .........................................................................................................................97
List of Abbreviations ........................................................................................................... 104
List of Figures ..................................................................................................................... 108
List of Tables ...................................................................................................................... 109
Annex(s) ............................................................................................................................. 110
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1 INTRODUCTION
The Netherlands Ministry of Defence (NL MOD) uses highly complex weapon system in
support of its armed forces. One category of these complex weapon systems are air-based
weapon systems. The sustainment of these weapon systems is cost intensive. One of the
materiel logistic processes is weapon system management (WSM), which intends to sustain
a weapon system in de most cost-effective way. Advanced system support concepts are
introduced in order to sustain existing and new air-based weapon systems. Performance
Based Logistics (PBL) is one of these system support concepts. The promise of PBL, higher
performance and lower life cycle costs, makes this system support concept interesting.
Future weapon systems, e.g. the Joint Strike Fighter (JSF), are supported by PBL NL DMO,
1998]. PBL might have an effect on the way weapon systems are managed. This research is
aimed at the effects of PBL might have on the WSM process especially from a NL DMO
perspective. The Netherlands Defence Materiel Organisation (NL DMO) is the materiel
logistic service provider for armed forces in the Netherlands. Literature indicates several
issues with the introduction of PBL support concepts within government. This chapter will
introduce these issues and subsequently provides the reason to conduct this research. First,
the issues related to PBL are discussed. From there the focus is pointed to the organization
and issues related to WSM within the NL DMO and the importance of weapon system cost-
effectiveness. This leads to the problem indication and the definition of the research
question.
1.1 Performance Based Logistics
In de last decade it seems that, Performance Based Logistics (PBL) has gained more
interest as a product support concept for weapon systems. The decrease in the development
of new complex weapon systems (fighter aircraft) drew the focus of weapon system
developers to other life cycles phases. Research shows that, depending on the complexity of
a weapon system, around 70% of the life cycle costs are generated in the sustainment phase
against 30% to the development and production phase [Atkinson et al, 2007 and Berkowitz et
al, 2004 and Klein et al, 2007]. This makes the sustainment phase interesting for industry
from a business perspective. The US DOD Office of Inspector General [2006] defines PBL as
a “strategy for weapon system life-cycle sustainment that links product support to weapon
system performance. The goal is to optimize total system availability while minimizing cost
and logistic footprint”. With PBL, product support is outsourced to a Product Support
Integrator (PSI) and is contracted based on weapon system performance instead of services
(e.g. repair and maintenance contracts).
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Shrinking defense budgets forced defense organization to not only focus on the effectiveness
of their weapon systems but also on the weapon system life cycle costs. The promise of
PBL, higher availability against lower costs, makes this support concept interesting for
Defense organizations were traditionally the support of weapon systems is the responsibility
of the Defense organization itself. PBL transfers this responsibility to the PBL provider, the
PSI. Within The Netherlands Defense Materiel Organisation (NL DMO) limited experience
exists with managing major complex weapon systems (e.g. ships, tanks, aircraft etc.) in this
environment.
1.2 Weapon System Management within NL DMO
In recent years, the importance of weapon system cost-effectiveness within The Netherlands
Ministry of Defense (NL MOD) increased [NL DMO, 2005 and 2009, AMC Seminar, 2009].
The decrease in numbers of weapon systems due to the end of the cold war, the
development in weapon system technology and shrinking defense budgets focused the NL
MOD on improving weapon system effectiveness and reducing life cycle costs. Recent
organizational restructuring (and downsizing), a further decreasing defense budget, the
introduction of new business management software (SAP introduction) and an increased
interest from within the NL MOD in weapon system life cycle costs have led to the
development of a WSM policy and the start of several pilot projects to professionalize WSM
[NL DMO, 2007 and 2008].
WSM within the NL MOD is organized as a tri-partite consultation process between the
operator (Operational Command), maintainer and system manager (both in the NL DMO).
Annex A provides a detailed NL MOD organization description. The aim of WSM, as defined
within the NL MOD, is to control the performance, availability and reliability of the weapon
system against the lowest possible life cycle costs within the set preconditions (regulations,
operational need) [Moll, 2008] or i.e. to be in control of the cost-effectiveness of the weapon
system. Each actor has a specific role. The operator formulates availability and user
requirements. The maintainer is responsible for providing support in order to restore weapon
systems into a serviceable state. The weapon system departments (WSD) within the NL
DMO Weapon System Directorate are responsible for the framework (standards) in which the
operator and maintainer have to act. The organization of WSM within the NL MOD is aimed
at controlling materiel logistic processes by the three actors [HLD MATLOG, 2008].
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1.3 Weapon System Cost-Effectiveness
As stated cost-effectiveness is (should be) the driving factor in sustaining a weapon system.
Juran defines cost-effectiveness as the value received for the resources expended, the ratio
of cost to (system) effectiveness [Stavenuiter, 2002] and can be presented as in figure 1.1.
Figure 1.1 Cost-effectiveness according Stavenuiter (2002)
In his research to a more integrated life cycle management (LCM) approach Stavenuiter
developed an Asset Management Control (AMC) approach to be able to get and keep in
control of weapon system (asset) cost-effectiveness. Stavenuiter (2002) defined Asset
Management Control as a management approach to manage all processes (specify, design,
produce, maintain and dispose) needed to achieve a capital asset capable to meet the
operational need in the most cost effective way for the customer/user. To achieve this,
Stavenuiter identified ten improvement factors:
1. Well-specified objectives
2. Transparent (technical) system breakdown structure
3. Transparent (logistics) process structure
4. System effectiveness measurers
5. (life cycle) cost measurers
6. Key performance indicators
7. System knowledge
8. Logistic knowledge
9. Management control knowledge
10. Information and communication technology
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The primary objective of AMC is to get and keep a grip on logistic processes and by that the
technical system (weapon system). Based on the ten improvement factors Stavenuiter
developed an improved AMC control system that can be applied to any organization, asset or
life cycle (figure 1.2).
Figure 1.2 Asset Management Control System according to Stavenuiter (2002)
In AMC, the following components are considered as essential:
- a through-life asset management program, to provide well specified objectives
- staff (managers and Engineers) throughout the life cycle, indicated as LCM teams, to
provide professional management control
- analysis and control tools to enable cost/performance control
- computer applications on a wide area network, to meet information and communication
needs
Limited research is available on applying AMC to military assets with a PBL support concept.
Sinay (2008) did research on the arrangement of Performance Based In-Service Support
cooperation’s. Sinay concluded that ‘no size fits all’ solution is available in structuring this
cooperation between the Operational Commander and the Product Support Provider.
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1.4 Problem Indication
It is noticed that, within the NL MOD experience with advanced product support concepts like
PBL is limited. Inquiry learns that (only) the Transport trucks of the NL MOD are supported in
a (full) PBL concept. However, none of the major complex weapon systems within the NL
MOD are supported by PBL.
The lack of PBL experience could be a problem because the main candidate to succeed the
F-16 fighter aircraft is the Joint Strike Fighter (JSF) for this moment. The JSF (or F-35)
comes with a full PBL support approach and will be the first major complex weapon system
within the NL MOD with such a logistic support approach. It is estimated that the sustainment
costs of the F-35 (based on the NL requirement for 85 aircraft) over the next 30 years will
equal around 11,3 billion euros [NL MOD, 2011]. Being in control of these sustainment costs
and the effectiveness of the weapon system, seen from an organizational as well as a
political perspective, is of the utmost importance. It is assumed that the introduction of a
major weapon system like the JSF with a PBL support approach will have huge influence on
the organization of WSM within the NL MOD from a WSD perspective.
In general, literature identifies several issues with introducing PBL support approach in
government:
- the role of government changes from transaction management in the traditional support
environment to performance management in the PBL environment [Beggs et al, 2005]
- PBL requires structural and cultural changes [Berkowitz et al, 2004 and Beggs et al, 2005
and DeVries, 2005]
- functions within government required in the traditional support environment are
transferred to the PBL provider [Beggs et al, 2005 and Koevoets, 2008]
- processes and procedures in government need to change [Beggs et al, 2005]
- commitment of stakeholders for PBL [Koevoets, 2008]
- knowledge (PBL, utilization, weapon system) which is required [Koevoets, 2008]
- reliable information system for operational, logistic and financial data [Beggs et al, 2005
and Koevoets, 2008]
- financing structure defense organization (“colors of money”, flexibility) [Beggs et al, 2005
and DeVries, 2005 and Ploos van Amstel, 2006]
- clear responsibilities [Berkowitz et al, 2004 and Ploos van Amstel, 2006]
- single face to the war fighter [Ploos van Amstel, 2006]
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- program management and consultation structure [Ploos van Amstel, 2006]
- management of relationship with stakeholders [Berkowitz et al, 2004].
As there are issues with introducing PBL support concepts within the government literature
also indicates issues with controlling weapon system cost-effectiveness. In a policy study [NL
DMO, 2009] on WSM NL DMO determined several issues for improving WSM (in NL MOD):
- clarity in WSM related concepts/ideas
- WSM requires an improved control concept
- decision criteria for WSM activities and the organization of WSM activities
- planning model for logistic support
- insufficient qualitative control
- insufficient information sharing
- insufficient insight in integral costs of a weapon system.
AMC indicates the following issues with organizing management control of capital assets
(weapon systems) in order to achieve cost-effectiveness:
- well-specified objectives
- a model of the technical system and (logistic) processes is required
- appropriate cost-effectiveness measures need to be defined
- appropriate key performance indicators need to be defined
- knowledge of system, logistics and management control is required
- information and communication technology.
The intent of this research is to study the effect of PBL support concepts on the organization
of the WSD’s within the NL DMO Weapon System Directorate (NL DMO/WS). The above-
mentioned issues on PBL, WSM and AMC, indicate that changes to the present way of
organizing WSM might be required in order to get and keep control over the cost-
effectiveness of weapon systems in such an environment.
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1.5 Objective and Research Question
From the previous paragraphs, the following objective for this research is derived:
Provide recommendations to NL DMO for organizing weapon system departments
responsible for air-based weapon systems in a PBL environment during the sustainment
phase in order to control weapon system cost-effectiveness.
From the objective, the following research question is formulated:
How to organize a weapon system department within NL DMO for an air-based weapon
system with a PBL support concept during the sustainment phase capable of controlling
weapon system cost-effectiveness?
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2 RESEARCH METHOD
2.1 Introduction
This chapter explains the research scope and applied method. Based on the research
question a research approach is determined. The research domain is established and the
research model is constructed.
2.2 Research Scope
The research problem initiates from the introduction of new weapon systems with a PBL
support concept (like the JSF) within the NL MOD. This research intends to provide
recommendations for organizing a weapon system department within the NL DMO Weapon
System Directorate Air Systems Branch (DMO/WS/ASB). The DMO/WS/ASB is responsible
for the framework (standards) in which the operator and maintainer have to act for air-based
weapon systems. From this perspective, this research is conducted.
According to the NL MOD present plans the F-35 (JSF) will be the first air-based weapon
system with a PBL support concept. In this concept product support is provided by industry
based on an agreed level of performance. The F-35 weapon system is used as a case study
performed to support this research.
Weapon systems, as complex and expensive systems, have different life cycles. For this
types of systems/assets Blanchard (1998) identifies six life cycle phases: (1) conceptual
design, (2) preliminary system design, (3) detailed design and development, (4) production
and or construction, (5) utilization and support (sustainment) and (6) phase out and disposal.
In most cases the sustainment (or system utilization phase) is the main part of the system life
cycle and incurs the main part of the life cycle costs as mentioned previously. This research
is limited to the sustainment (operational) phase of the weapon system.
The intended outcome of this research is a set of recommendations to organize a weapon
system department capable of controlling weapon system cost-effectiveness. For the
management of capital assets Stavenuiter (2002) developed an approach to get and keep
control over system cost-effectiveness. The tenets of this approach are used for controlling
weapon system cost-effectiveness. The AMC approach from Stavenuiter (2002) is used as a
basic pre-requisite.
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The literature on organizing, organizations and organizational design is extensive and varied.
The aim of this research is to design an effective organization (weapon system department)
capable of controlling weapon system cost-effectiveness in a PBL environment. In his
research on AMC, Stavenuiter used the management control system of De Leeuw (1990) as
a basis for the improved Asset Management Control System (figure 2.1).
Figure 2.1 Management Control System of De Leeuw (1990 and 2002)
De Leeuw uses this basic management control system in organizing effective organizations
making it interesting with respect to this research. This system theory approach from De
Leeuw (1990) is assumed to be most promising because it provides a practical and
interdisciplinary approach which takes into account the cohesion between different elements.
The approach from De Leeuw is therefore used a basic approach with respect to
organizational aspects in this research.
This research will not incorporate the actual change process to the new organization but
provides a framework for a future organization.
2.3 Research Approach
The intent of this research is to resolve a practical (organizational) problem. As defined by
Verschuren and Doorewaard (2004) practical research is intended to perform an intervention
in order to resolve an existing practical situation. Practical research consists of five basic
steps: problem indication, diagnosis, design, intervention (implementation) and evaluation
[Verschuren and Doorewaard, 2004]. For resolving organizational problems, De Leeuw
defines a similar approach (diagnosis, design and implementation). In the diagnosis and
design phase specific elements from the approach from De Leeuw (2002) are used.
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Problem Indication
In Chapter 1 (Introduction) issues were identified in relation to the introduction of PBL
support concepts in government and with controlling weapon system cost-effectiveness
providing the trigger to perform this research.
Diagnosis
This phase of the master thesis intends to analyze the ‘problem’ based on the problem
indication. The diagnosis phase consists of a literature review, the analysis of the results, to
work out a problem definition and define Terms of reference (TOR’s) for the future
organization (Chapter 3 and 4). The diagnosis phase starts with a literature review and field
study (Chapter 3). The literature study provides the theoretical background of this research.
From the research objective, research question and scope, three main subjects can be
derived: Performance Based Logistics as a product support concept, controlling weapon
system cost-effectiveness and organizing. Based on these research subjects the following
literature is assessed: Asset Management Control, Performance Based Logistics and
Organization Theory. The research environment is the NL MOD organization. In addition a
field study is conducted. In order to determine the role of the WSD the effects of PBL on NL
MOD WSM are determined. The field study aims at the organization of WSM within the NL
MOD and the role of the WSD’s in the NL MOD WSM concept. The problem definition
(Chapter 4) starts with an analysis of the literature review and field study results. The
analysis provides the key findings with implementing PBL product support concepts on the
organization of WSM and the WSD’s within the NL MOD. From these findings a problem
specification is developed. The final step in the diagnosis phase develops the Terms of
Reference for the organization of WSM and WSD in a PBL environment.
Design
The diagnosis phase defined the TOR on which the actual design of the weapon system
department is made. The design phase (Chapter 5) starts with establishing the design
approach followed by a case study. Because the research problem initiates from the
introduction of a new fighter aircraft, with a PBL support concept, the future weapon system
department for the F-35 is used as a case study. Involvement of stakeholders in the design
process is essential [De Leeuw, 2002]. In the design phase a review with stakeholders is
planned to validate the conceptual WSM and WSD design.
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Intervention (Implementation) and Evaluation
Usually the design (‘new organization’) is implemented and evaluated in this phase. At this
time none of the major weapon systems within the NL MOD have a PBL support concept. It
is expected that the F-35 will replace the F-16 in the future. The F-35 might be the first
weapon system with a PBL product support concept but is not introduced within the RNLAF
before 2019. Therefore, the actual realization of the F-35 weapon system department within
the NL DMO cannot be validated. The design solution is reflected with stakeholders to obtain
insight in the validity, completeness and feasibility of the design (Chapter 5).
Research validation is an important aspect in research and is used to check the accuracy
and credibility of the findings. Various methods are used for validation purposes throughout
this research:
- Triangulation: different sources of data will be used (literature and field study)
- Member checking: data, interpretations and conclusions are tested with stakeholders.
2.4 Research Model
Based on the research question and approach a research model is constructed. Three prime
phases are identified: problem indication, a diagnosis phase and the design phase.
Figure 2.2 Research Model
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3 LITERATURE REVIEW AND FIELD STUDY
3.1 Introduction
This chapter contains the results of the literature review and field study. From the research
objective and question three main subjects are derived: PBL, controlling cost-effectiveness
and organizing. The literature review focuses on these three subjects. The results of the PBL
literature review are described in paragraph 3.2. From a research interest perspective AMC
is chosen as a basis for controlling weapon system cost-effectiveness. The results of the
literature review concerning AMC are discussed in paragraph 3.3. In paragraph 3.4 the
basics on organization theory with respect to organization structural aspects are
summarized. Finally paragraph 3.5 contains the results of the field study on the organization
of WSM within the NL MOD including the role of the WSD’s.
3.2 Performance Based Logistics
3.2.1 Introduction to PBL
Chapter 1 defines PBL as a strategy for weapon system life-cycle sustainment that links
product support to weapon system performance. PBL is about buying results or outcomes
(performance) instead of initiating and managing transactions. Key tenets of PBL are an
improved level of readiness, lower support costs and a smaller logistic footprint [DOD Office
of Inspector General, 2006]. It is assumed that a PBL can deliver these tenets. The
knowledge base, flexibility and economies of scale are the basic principles for improving
product support under a PBL concept [Vos et al., 2011]. Product support is a package of
logistic support functions necessary to maintain the readiness and operational capability of a
system or subsystems [Raymond et al, 2003].
The goal of PBL is to optimize ‘total system while minimizing cost and logistic footprint. The
Defense Acquisition University (DAU) states that the cornerstone of PBL is the purchase of
weapon system sustainment as an affordable, integrated package based on output
measures such as weapon system availability, rather than input measures such as parts and
technical services. The application of PBL will differ from program to program, or system to
system, because each has unique characteristics that influence the design and
implementation strategies [Mendoza and Devlin, 2005]. It depends on the level of risk that
the government is willing to transfer to the industry as visualized in figure 3.1. LM Aero
Petrick Spitters AMC MSc
13
(2007) for example defines 4 levels of PBL: (level 1) parts and engineering services, (level 2)
fill rates, (level 3) Subsystem availability and (level 4) platform availability.
Risk Transfer under PBL
All
All Support
Some Support
Assist w/ Support
Minimal
Government
Ri sk
Minimal
Assist w/ Support
Some Support
All Support
All
Contractor
Ri sk
Figure 3.1 Risk Transfer with different product support options
[PBL Support Guidebook, 2002]
Literature identifies three basic roles in a PBL construct: the war fighter (customer), the
Product Support Manager (PSM) and the Product Support Integrator (PSI) [DAU, 2005]. The
war fighter is identified as the user of the system, the PSM is responsible for system
performance and the PSI is responsible for system product support and accountable for
system performance. A Performance Based Agreement (PBA) between the war fighter and
the PSI identifies the war fighters expected performance goals and objectives, such as
availability and cost, and establishes a target price based on the desired level of
performance [DOD IG, 2006]. Incentives for a predefined level of performance are
incorporated in the PBA. Performance must be tracked, measured and assessed. For PBL
performance is defined in terms of military objectives using operational availability,
operational reliability, cost per unit usage, the logistics footprint and logistics response time
[DOD IG, 2006]. These PBL performance goals are defined as metrics. Metrics must be
understandable, economical, field-tested, highly leveraged, timely, improvement-oriented,
applied to all life cycle phases, useful at multiple levels. Metrics must be tied to risk and
problem areas, are only as good as underlying data, may evolve with the program, use
multiple metrics but do not measure everything [Raymond et al., 2003]. Data management
(real time or near real time) is essential for overall effectiveness of logistic processes in
contributing to weapon system availability and LCC factors (DAU, 2005).
Petrick Spitters AMC MSc
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Beggs et al (2005) supports the importance of data management and the relation between
effective data management and establishing reliable performance metrics. Raymond states
that metrics should be tied to risk and problem areas, are only as good as underlying data,
multiple metrics are required and do not measure everything [Raymond et al, 2003].
3.2.2 PBL from a government perspective
This paragraph identifies findings in PBL literature from a government perspective. In a PBL
environment, roles of actors in the sustainment phase change. Within the US DOD approach
three basic roles can be identified [PSM Guidebook, 2011]: the program manager acts as a
total life cycle systems manager, the Product Support Manager (PSM) has an oversight role
of monitoring and assessing performance against the PBA and the PSI is a single point of
accountability for support and may be from the government or private sector. Figure 3.2
shows the management concept as defined by the US DOD within a PBL construct.
Figure 3.2 The Product Support Business Management
highlights [PSM Guidebook, 2011]
In order for the PSI to be accountable for weapon system performance the PSI needs to
have sufficient responsibility and authority over product support processes. When introducing
PBL support concepts, product support functions usually performed within the government in
a traditional logistic support concept, are transferred to the PBL provider [Beggs et al, 2005,
Mendoza and Devlin, 2005 and Koevoets, 2008]. In a traditional logistic support concept the
government is contracting logistic support elements themselves (DAU, 2011). The product
Petrick Spitters AMC MSc
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support functions that are transferred are logistic support processes related to Supply Chain
Management (SCM), engineering, maintenance and technical management [Claiborne 2004,
Beggs et al 2005, Mendoza and Devlin 2005]. Functions that are transferred depend on the
level of PBL i.e. which risks are transferred to the PBL provider (PSI) [Mendoza and Devlin,
2005 and PBL Support Guidebook, 2002]. The transfer of organization functions to the PSI
changes the role of the government. With the transfer of traditional support functions to the
PSI the role of the government changes to an oversight role by monitoring outcomes and
ensuring alignment between the war fighter (operator) and the PSI [Beggs et al, 2005]. Also
responsibility and authority within a PBL construct changes. The PSI is the single point of
accountability for support of the weapon system in a PBL construct [Mendoza and Devlin,
2005]. Retaining to much responsibility and authority within the government in relation to the
product support function (transferred to the PSI) will have an adverse effect on the
possibilities of the PSI to increase cost-effectiveness [Beggs et al, 2005]. Responsibilities
must be clearly structured between the PSI and the government [Berkowitz et al, 2004 and
Ploos van Amstel, 2006].
Literature also indicates the effects of PBL on the budgeting process. Beggs et al (2005)
state that budget flexibility is limited in a performance based support concept. Funding
instability is a potential risk for the performance based support contracts in relation to the
required performance of a system. The fragmentation of defense budgets (sustainment vs.
new requirements) will require a different approach on budgeting from a government
perspective (colors of money) [Beggs et al, 2005 and DeVries, 2005 and Ploos van Amstel,
2006].
The nature (and advantages) of PBL requires long term contracts between the user and PBL
provider (PSI) [Beggs et al, 2005, US DOD, 2011]. The longer the scope of the contract, the
more investments the PBL supplier can make to improve the performance of the system [Vos
et al, 2011]. Contractors say a three- to five-year PBL arrangements are the most cost-
effective because they can invest in supplies [DefenseNews, 2011].
Literature also indicates the requirement for a cultural change. This cultural change comes
from the focus of PBL on performance. A performance management culture is required and
this requires a change in organization culture [Beggs et al, 2005]. Marshall supports this
conclusion by stating that a performance driven and continuous improvement culture is
required [Marshall, 2009]. This cultural change also effects the government. The role of the
government to a more oversight role government changes the focus from transaction to
performance management [Beggs et al, 2005]. Another effect from the implementation of
PBL support concepts is the requirement for a close cooperation with PSI in a PBL
Petrick Spitters AMC MSc
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environment [Ploos van Amstel, 2006]. An atmosphere of trust and commitments with both
customer and PSI is required [Berkowitz et al, 2004]
The introduction of advanced support concepts like PBL requires different skills and
knowledge within the government. Knowledge of PBL and PBA’s is essential for successful
implementation of PBL support concept [Mendoza and Devlin, 2005 and Koevoets, 2008].
Mendoza and Devlin (2005) argue that this knowledge must be distributed through the entire
organization (government). A basic requisite of PBL is the close cooperation between the
government and the PSI, which should be based on mutual trust. Knowledge and skills
concerning teaming and managing alliances are essential to manage PBL support concepts
[Ploos van Amstel, 2006]. Maintaining weapon system knowledge in a PBL environment from
a government perspective is a concern. Koevoets (2008) argues that knowledge of PBL,
weapon system utilization, and the weapon system itself, is required from a government
perspective. In addition, knowledge on performance management is required [Beggs et al,
2005]. USAF is retaining nucleus logistic skills in the areas of depot maintenance to retain
sufficient supply and technological expertise [Claiborne, 2004].
3.3 Asset Management Control
AMC aims to optimize the management control and logistic support (sub) systems
throughout the life cycle with respect to the functionality of the technical system [Stavenuiter,
2002]. AMC has four main objectives: (1) specify the system functionality, (2) acquire the
system functionality, (3) achieve cost-effectiveness and (4) justify phase out [Stavenuiter,
2002]. The AMC system approach aims to stimulate all logistic actors to fulfill their part in the
most cost-effective way by telling them what the result should be and to show them the
impact of their contribution to the whole system [Stavenuiter, 2002]. The Logistic Process
Cycle is used to establish a relationship between costs and system effectiveness. The
material logistic process is subdivided into eight process steps; the Logistics Process Cycle
(LPC) in figure 3.3. Each step has to be in balance with the preceding and subsequent steps
in the cycle, all related to the Integrated Logistics Support (ILS)/LCM analysis. Important for
this research is the control direction, which is counter clockwise!
Petrick Spitters AMC MSc
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Figure 3.3 The Logistic Process Cycle
The elements of AMC are the technical system, logistic processes and the operational
environment. During the assets life cycle the LPC must be kept in balance. The materiel
logistic processes are divided into 4 subsystems: the operational system (asset user),
management control system (LCM team), logistic support system (logistic processes) and
the technical system (the asset itself). These four subsystems construct the Asset
Management Control System (AMCS) in figure 3.4.
Figure 3.4 Asset Management Control System according to Stavenuiter (2002)
The management control system (LCM team) has a pivotal role in the AMCS because it
translates requirements into directives for the logistic processes and controls the results. In
order for the management to control the performance and costs, a logistic program is
Petrick Spitters AMC MSc
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required based on an ILS analysis. For a management control system, the following
components are essential [Stavenuiter, 2002]:
� A through life asset management program, to provide for well specified objectives
� Staff (managers/engineers) throughout the life cycle, indicated as LCM teams, to provide
professional management control
� Analysis and control tools to enable performance and cost control
� Computer applications on a wide area network to meet the information and
communication needs
A through life asset management program is required. AMC states that clear procedures and
guidelines are required to get and keep grip on cost-effectiveness and to bring across
different actor roles. In AMC, each actor is informed of their role in the logistic process and
their contribution to the system performance in relation to key performance indicators. This
requires a transparent technical system breakdown structure and a transparent (logistic)
process structure as agreed through a life management program. The Logistic Program
contains all data and information necessary to manage logistic processes in the most cost-
effective way [Stavenuiter, 2002]. The logistic program includes: asset requirements, the
system structure, logistic plans and cost estimates/budget. The LPC is the basis for setting
up the requirements as stated in the logistic program.
AMC requires a permanently appointed LCM team. The LCM team consists of
representatives from operations, design and maintenance. In the sustainment phase,
achieving and controlling cost-effectiveness is the main objective and is the function of the
LCM team. This is achieved by getting and keeping grip on the logistic processes and by that
on the technical system (asset) [Stavenuiter, 20020]. Stavenuiter proposes a matrix or
project organization with personnel from different actors (operator, maintainer and designer)
for effectively performing asset management control. The LCM team must be able to
translate operational requirements into directives and controls into accounts. Responsibility
and authority of actors (including the LCM team) depend on the organization structure and
are laid down in the activity diagrams (based on IDEF0 process diagrams). Managing and
controlling a technical system and its logistics processes in complex situations requires well
trained actors and skilled teams for effective management control. Knowledge and skill in
team management, system (support) engineering and process management, is required as
management control knowledge.
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In AMC, the technical system and logistic support system are incorporated in an LCM model.
Effective management control requires the use of an LCM model for monitoring, analyzing
and controlling system performance (support decision-making). This system model consists
of function diagrams, installations diagram and activity diagram and provides insight in the
performance of the asset. Stavenuiter (2002) has defined a conceptual LCM dataset.
AMC requires computer applications on a wide area network to meet information and
communication needs. Information management is pivotal for AMC. Availability of reliable
and relevant information over the lifecycle of the asset is essential for control as are analysis
and control tools. The communication is structured around Asset Management Information
and Communication (AMICO) system, LCM meetings and bilateral communication.
3.4 Organization Theory
The focus of this research is organizing a department which has a role in the WSM of an air-
based weapon system. The review on organization theory focuses on the characteristics of
organizing and organization structures. As indicated in chapter 1, literature on organization
theory is extensive. For this research the theory of De Leeuw (1990 and 2002) is selected
because it forms the basis for AMC and the AMCS.
De Leeuw (1990) approaches organizations as complex systems. An organization is a
system of (simple or complex) positions (roles, functions) performed by employees supported
with resources required for the physical operational processes [De Leeuw, 1990]. The basic
system (or organization) according to De Leeuw is visualized as in figure 3.5. The basic
organization consists of a system to be managed and a managing body in relation to the
environment. According to De Leeuw (2002), organizing is selecting the right organization
structure taking into account the organization environment and goals.
Figure 3.5 Organization according to De Leeuw (1990)
Petrick Spitters AMC MSc
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Organization Structure. De Leeuw (1990 and 2002) views organization structure in a broad
perspective. Organization structure is the whole of relationships the:
- creation of functions, departments and their relations (subsystem dimension),
- control and budgeting system,
- decision-making procedures concerning planning, methods and policy.
De Leeuw refers to structure in this respect as position structure and procedure structure.
Position structure is the relation between positions and departments. Procedure structure is
the relation between processes in the organization.
De Leeuw defines three groups of organization structural parameters: division of labor,
connection parameters and control characteristics in relation to the formal structure of an
organization (Table 3.1).
Table 3.1 Structural Parameters
Group Structural Characteristic Remarks
Division of
labor
Unit grouping Grouping of activities in subsystems
Centralization Degree of dependency in work
processes between organization
subsystems
Task and function Grouping of tasks on an individual level
Specialization Degree of limitation in corresponding
sub-activities
Connection
parameters
Authority and
responsibility
Decision power over control measures
(authority) and accountability
Delegation Delegating authority and responsibility
to a lower level in the organization
Functionalization of
command
Separation of command to aspects
Participation Participation in decision making
Control
characteristics
Standardization Programming behavior
Uniformity Analogy in behavior
Formalization Capture behavior
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There is no one perfect structure for an organization. The contingency theory states that
structure depends on the environment in which it operates, the strategy (goals) of the
organization and the technology it uses to accomplish its primary process. In the generalized
contingency approach from De Leeuw (2002) three factors affect the management system:
strategy and goals, complexity of the environment and the complexity of the primary process.
Figure 3.6 shows the generalized contingency approach from De Leeuw.
Figure 3.6 Generalized Contingency Approach [De Leeuw, 2002]
Strategy. The strategy and goals of an organization affect the management system
characteristics and scopes the organization environment. The organization structure
depends on the strategic focus of the organization. A more external strategic focus requires a
more decentralized (or horizontal) organization structure [Mintzberg, 1989 and Daft, 2007].
The strategic focus also affects the environment of the organization as it determines the
organization boundaries. On the other hand organization goals determine the cohesion and
meaning of the management system [De Leeuw, 2002].
Organization environment. The organization structure (configuration) depends on the
complexity and stability of the organization’s environment [Mintzberg, 1989]. Figure 3.7
visualizes the effects of the organization environment on the organization structure.
Petrick Spitters AMC MSc
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Figure 3.7 Organization environment
Primary process. The primary process is essential in the system theoretical approach and is
the transformation (and transaction) process directly related to the strategy (and goal) of the
organization (De Leeuw, 2002). This primary process is directly connected to the
organization environment. Important for defining the primary process is the system boundary
(between system and environment). More than one primary process is possible in one
organization. As mentioned previously in this paragraph technology is one of the
contingencies affecting the organization’s structure. Technology refers to the work
processes, techniques, machines and actions used to transform organizational inputs
(materials, information, ideas) into outputs (products) [Daft, 2007]. This is the way the
primary process is executed. Thompson refers to technology in relation to interdependence
[De Leeuw, 2002 and Daft, 2007]. “Interdependence is the extent to which departments
depend on each other for resources and materiel to accomplish their tasks” [Daft, 2007].
Thompson defines pooled, sequential and reciprocal interdependence. Pooled
interdependence requires a centralized organization configuration while reciprocal
interdependence requires a decentralized organization configuration.
Management. Management is the whole of directing, organizing or controlling processes in
which organization members take part [De Leeuw, 2002]. In the system theoretical approach
management is a subsystem. As the organization structure the management form depends
on the strategy, environment and the system to be managed (figure 3.8).
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Figure 3.8 Management Context
In order to effectively control the system De Leeuw (1990 and 2002) defined specific
requirements:
- clear goals must be established
- a model of the system to be managed is required
- information about the environment and state of the system is required
- sufficient control measures must be available
- sufficient capacity for managing information.
In addition, the controllability of the system is a factor. Are effective control measures
available to control the system!
Culture. Organization culture is an important aspect in organizing and management.
Hofstede defines organization culture as the collective mental programming and
demonstrates itself through the behavior of individuals in the organization [De Leeuw, 2002].
Culture is the controlling mechanism behind the behavior of people in an organization.
Culture is therefore a system (organization) characteristic. Organization culture should
reinforce the strategy and structure of an organization so the organization can be effective
within its environment [Daft, 2007]. Two dimensions are important in characterizing
organization culture: the extent to which the organization environment requires flexibility or
stability and the extent to which the organization strategic focus and strengths are internal or
external (figure 3.9).
Within an organization culture, subcultures within teams or departments can exists which
differ from the overall organization culture. They reflect the common problems, goals and
experiences within that teams or department. Organization culture is difficult to measure and
to change [De Leeuw, 2002 and Boonstra, 2006]
Petrick Spitters AMC MSc
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Str
ate
gic
Focu
s
Figure 3.9 Organization Culture
3.5 NL MOD WSM Field Study
In this paragraph Defense policy, regulation and requirements related to the research subject
are evaluated. For this research the Defence Governance Model, High Level Design Materiel
Logistics (HLD MATLOG), the WSM policy vision and Military Airworthiness Regulations
(MAR’s) are applicable (paragraph 3.5.1). Also the effects of the recent budget cuts on the
Defence organization are discussed. In addition, the present structuring of WSM and with a
specific focus on the NL DMO role (WSD), and their tasks and responsibilities are described
(paragraph 3.5.2).
3.5.1 MOD policy, requirements and procedures
Defence Governance Model. In 2003, a new Defence Governance Model (DGM) was
established. This governance model focuses on output and establishes a clear division in
responsibility between policymaking, execution, oversight and support. The emphasis in the
governance model is on output and clearly states the ambition for performance based control
(management). In this construct, the operational commanders (OPCO) are responsible for
the readiness of operational units and the Defence Materiel Organisation (DMO) is
responsible for all materiel logistics. The agreement between the OPCO and DMO on the
materiel logistic support is laid down in a ‘Dienstverleningovereenkomst’ (DVO). The DVO is
a form of a Service Level Agreement (SLA). It contains the provided services and the budget
for materiel logistics activities provided under the DVO. The Defense organization structure,
processes, responsibility and authority are based on this Governance model.
Petrick Spitters AMC MSc
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Policy, Planning and Budgeting Procedure. The Policy, Planning and Budgeting Procedure
(Beleid-, Planning- en Begrotingsprocedure BPB-procedure), is the essence of the Defense
management process. The BPB-procedure assures the relation between the ambition of the
Defense organization, the required resources and the management of those resources. The
procedure provides insight in the relation between ambition, objectives and goals, activities
and resources. The BPB-procedures consists of a four-year cycle and a year cycle. The year
cycle starts with determining the required budget and multi-year-estimates with the
framework defined in the four year cycle. The starting point is the Defense Plan
Memorandum (DPM) and the AGCDS. The basis of the planning process is the ambition of
the Netherlands and International commitments translated in the ‘Aanschrijving
Gereedstelling Commandant Der Strijdkrachten’ (AGCDS) to general goals and objectives
and the business plans. In turn the AGCDS forms the basis for the year cycle. The Chairmen
of the Joint Chiefs of Staff (CDS) is, as corporate planner, responsible for the Defense Plan.
The Head of Financial Control (HDFC) is responsible for the budgetary framework and the
validation of the AGCDS to this budgetary framework. Two planning documents are relevant
for this research. The AGCDS provides the operational need and the Defence Exploitation
Plan Weapon systems (DEP-W) because it contains the sustainment of weapon systems.
For air-based weapon systems, planning is performed within the operational command
(OPCO) and is laid down in the weapon system roadmap. The basis of the planning process
is the AGCDS. The goals and objectives are then translated in the operational need. The
operational need is translated in an operational planning (flying program), required
performance and required (or provided) budget and is laid down in the business plans, SLA’s
and the Road Map (per weapon system). The roadmap is managed in the WSM tri-partite
consultation structure. The planning cycle for sustaining a weapon system is managed by the
‘road map’.
HLD MATLOG. For the introduction of new business management software (SAP) the
materiel logistic support environment within the Defense organization was laid down in the
High Level Design Materiel Logistics (HLD MatLog). The HLD MatLog is based on the
Defense Governance Model. The process scope of the HLD MatLog encompasses system
logistics (weapon system management, maintenance and materiel readiness), supply chain
logistics, projects/procurement and disposal.
System logistics focuses on the availability of weapon systems. The operational need is a
pre-condition. Cost-effectiveness is the basic paradigm with a total life cycle perspective.
WSM is performed by three actors: operator, maintainer and standards counter. The
Petrick Spitters AMC MSc
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standards counter will be referred to as system manager in this research. Each actor has a
different but equal role. The sustainment activities are aligned in the WSM tri-partite
consultation between the operator, maintainer and system manager. The WSM triangle
seeks integral alignment and planning, central control over scarce capacity and resources,
achievement of collective agreed goals and the influence of system logistic standards based
on operational planning. The sustainment of weapon systems is laid down in Integrated
Logistic Support (ILS) or system plans.
The HLD MatLog defines two different models: green and orange. The green model
represents the present structuring of the materiel logistic support environment. In the green
model, the availability requirements are based on the intended activities related to the
required and available budget. Management is pro-active and standards are defined and
controlled. There is an integral insight in costs.
The orange model defines the future (>2013) ambition. The orange model has a performance
based management perspective. Weapon system performance is actively monitored,
assessed and controlled, in the WSM consultation structure between the operator,
maintainer and system manager. The ILS/system plan, maintenance and operational
standards are up to date. Modifications to improve system performance are pro-actively
translated into the weapon system design. The system manager also has an audit function to
maintain standards. This audit function implies the domain of the operator and maintainer.
WSM Policy Vision. The WSM structure within the Defence organization is based on the
Defence Governance Model and HLD MATLOG (green variant). In the introduction WSM
was defined. Cost effectively achieving the availability requirement is jointly and structurally
managed by the operator, maintainer and system manager in a WSM tri-partite consultation
structure. This requires alignment between management of operational readiness (operator)
and management of logistic support (system manager and maintainer). ILS and Life Cycle
Costs (LCC) play an important role in WSM. The starting point in the sustainment phase is
the standards framework laid down in the ILS/system plan.
WSM requires different management expertise: product management, configuration
management, ILS management, contract management, quality management, financial
management, project management, information quality management and administration. The
NL DMO WSM concept is presented in figure 3.10.
Petrick Spitters AMC MSc
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Figure 3.10 WSM Ideal Model according to NL DMO
The WSM policy vision acknowledges that WSM is differently structured for different weapon
systems (contingency theory). One of these contingencies is the complexity of the weapon
system and its sustainment processes. Different levels of WSM are established related to
weapon system characteristics [NL DMO, 2009]. Prime weapon systems, which attain
directly to land, sea or airpower, e.g. a fighter aircraft, are category A systems and require,
depending on the complexity of the system and sustainment, level 1 WSM. Level 1 WSM is
characterized by rigorous configuration management, a tri-partite consultation structure,
maintenance concept, pro-actively performing maintenance analysis, available roadmap (mid
and long term planning) and a portal to communicate to all stakeholders. For other category
weapon systems (B and C) level II en III WSM is applicable (less stringent then level 1).
Military Airworthiness Regulations. To sustain safety in military aviation the NL MOD is
introducing Military Airworthiness Requirements (MARs) based on the ‘Total Aviation Safety’
approach. The MAR’s not only cover the airworthiness certification of the technical design
but also the production, operations, maintenance, training, air traffic management etc. The
MAR’s are derived from the regulations for civil aviation but are adapted to the military
environment. Figure 3.11 shows the structure of the airworthiness regulations within the NL
MOD.
Petrick Spitters AMC MSc
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Figure 3.11 Structure of Airworthiness regulations
With respect to this research the MAR’s for the operator, maintainer, supply organization and
designer are relevant. For operating the aircraft, the operator has to comply with the
requirements of the MLE-OPS, the maintainer with the MLE-145, the supply organization
with the MLE-DSO and the designer with the MLE-21. This research focuses on the weapon
system departments within the NL DMO which, in relation to the MAR’s, is seen as the
design organization (MLE-21). In the MAR-21, the type design organization is responsible for
the type design (or type configuration) and continued airworthiness. The design organization
is the holder of the Military Type Certificate (certifying airworthiness of the design of the
aeronautical product). Continued Airworthiness can be defined as all tasks and processes
that ensure that the initial (airworthiness) certification baseline, once granted, is maintained
through life within an acceptable level of risk [ICAO, 1998]. The introduction of the MAR’s
influenced the structure of the Defence organization in relation to the function, tasks,
responsibility and authority of parts of the organization. The MTCHO also performs a limited
number of MLE-OPS/Subpart M (Maintenance Management) and MLE-145 tasks (laid down
in the SLA between the operator and system manager).
Military Aviation Authority
MAR-OPSOperator
MAR-FCL'sTrainer flight crew
MAR-145Maintainer
MAR-147Trainer technicians
MAR-21Military Type Certificate Holder
Subpart M
AirworthinessCriteria &
Requirements
MAR-66 MAR-STD
Holder
+
MTHOE
MTHOA
MME
MOEMTOE
MAOC
MOAMTOA
FTOE
FTOA
TRTOE
TRTOA
OM
Type Design
aircraftmaintenance
licence
Certif icate ofAirworthiness
��
�� Release toService
crewlicences
Statement ofConformity
�
TypeInvestigation
Military TypeCertif icate
Certif icate ofRegistration
Registration
DRsDRs
O&ARs
DRs
DRs
SBsADsODs
ADs
SBs
ODs
ADs & ODs
Petrick Spitters AMC MSc
29
Development of Cost Models. As a result of different pilot projects to improve control over
weapon system life cycle costs the NL DMO started a pilot project to develop a cost model.
This pilot project aims at developing a cost model for major weapon systems (CAT A) for
predicting sustainment costs as a factor in support of decision making related to availability
and performance of weapon systems during operations. First results of the pilot show that
insight in sustainment costs per weapon system is possible but with present legacy
information systems it is difficult to accurately predict costs. The basis for the cost model is a
high-level form of Activity Based Costing. At this time, the model only attributes costs to the
weapon system level (top level).
NL DMO Vision of PBL. In 2010, a vision is developed on the use and applicability of PBL
support concept from a contracting perspective within the NL DMO. This document describes
the advantages and disadvantages of PBL in relation to traditional support concepts and
strategic sustainment capacity and knowledge.
NL MOD Restructuring. Due to budget cuts the NL MOD is restructuring the Defense
organization [Hillen, 2011]. This incorporates a reduction in materiel and a restructuring of
the organization specifically in the materiel logistic field. The following aspects of the
restructuring might affect the WSM within the NL MOD:
- introduction of the management paradigm: ‘Je bent er van, dan ga je er over’. In essence
this means that responsibility and authority should be aligned.
- management relations and processes are simplified by clustering responsibilities and
establishing roles consistency,
- CDS provides budget to NL DMO and OPCO for operational task,
- NL DMO has advice function on outsourcing decisions (related to OPCO),
- OPCO determines the services required from NL DMO in relation to the operational task
and available budget,
- accountability of NL DMO to CDS, HDFC is responsible for budget oversight,
- outsourcing can contribute to the reduction of management complexity,
- outsourcing might affect core competence of the organization (balancing),
- the logistic establishments of NL DMO (for air-based weapon systems the LCW) will
transfer to the respective operational commander (OPCO),
- DWS and DP&V will transfer to the Secretary General (SG) organization of the NL MOD,
- a reduction in personnel of approximately 30% for NL DMO
Petrick Spitters AMC MSc
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3.5.2 WSM Characteristics and the NL DMO Organization
WSM Characteristics. The Defence Governance Model, HLD MatLog, WSM policy and
related present structure of the organization, are the basis for the WSM structure. In order to
sustain the aircraft cost-effectively the air-based weapon systems are managed in a tri-partite
consultation process (see figure 3.12) between the aircraft operator or user (RNLAF), the
maintainer (RNLAF and LCW) and the system manager (Air Systems Branch) [NL
DMO/Directorate of Materiel Policy, 2005]. Coupled to the WSM responsibilities are the
MAR’s as discussed previously.
Figure 3.12 Weapon System Management Triangle
The tasks and responsibilities of this tri-partite consultation structure and respective actors
are described in annex A. No single actor has authority over WSM. The 3 actors execute
authority on an equal basis in the WSM consultation structure.
NL DMO Organization. Annex A provides an overview of the NL MOD and NL DMO
organization. The department relevant to this research is the Directorate of Weapon Systems
(DWS). The DWS consists of 3 different branches: Sea System Branch, Land Systems
Branch and the Air Systems Branch (ASB). The Air Systems Branch is responsible for the
‘system management’ function and the MTCH function for air-based weapon systems. The
branch director is the MLE-21 Accountable Manager and MTC Holder. The ASB is divided in
three different departments based in weapon system type: helicopters, transport aircraft and,
fighter and training aircraft. These departments are divided in sections; system management,
type management, maintenance engineering and foreign liaisons, depending on the type of
product support that is required for the aircraft type. Annex A provides the functions that are
performed within the various sections. Concerning the MAR-21 environment the WSD is the
mandated MTC holder and is responsible for the MTC and sustaining the MTC.
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Other directorates that contribute to the processes performed by the ASB are the Directorate
of Planning & Control (DP&C), the Directorate of Personnel and Organisation (DP&O) and
the Directorate of Requirements, Policy and Plans (DOBBP). The DP&C is responsible for
setting up the operational processes, managing policy planning, operational planning and the
budgetary process and providing financial support (process design, drawing up operating
plans, drawing up monthly reports for the central staff and drawing up management reports,
draws up budget). Financial Control is responsible for all measures aimed at the legitimate,
efficient and effective assignment and spending of government resources, which are
assigned to the NL MOD. DP&V is responsible for the process of providing materiel that
consists of procurement and project management, all procurement activities on a functional
level and government quality assurance. DP&O provide products and services to build up
and maintain the organization, oversees process of intake, throughput and outflow of
personal. DOBBP is responsible for corporate planning and operational requirements.
In the context of this research, the DWS Air Systems Branch is responsible for system
management of air based weapon systems (system manager) and is the Military Type
Certificate holder in relation to the Netherlands Military Airworthiness Requirements.
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4 PROBLEM DEFINITION
4.1 Introduction
The problem definition starts with an analysis of the findings from the literature review and
field study (paragraph 4.2). Paragraph 4.3 identifies the key issues and develops the problem
specification. Based on the problem specification, TOR’s are derived for developing a
conceptual WSD organization in the design phase of this research (paragraph 4.4).
4.2 Analysis
The bases for the analysis are the findings from the literature review and field survey. First
the effects of PBL on controlling weapon system cost-effectiveness are discussed
(paragraph 4.2.1). Paragraph 4.2.2 analyses the findings related to the WSM organization
structure in a PBL environment. In paragraph 4.2.3 WSM responsibility and authority are
discussed. PBL has effects on the core competence of the WSM organization. This is
discussed in paragraph 4.2.4. PBL and AMC concepts also affect the WSM organization
culture which is discussed in paragraph 4.2.5. Paragraph 4.2.6 provides the analysis results
of the impact of PBL on the WSD organizational function, organization structure and
responsibility and authority.
4.2.1 Controlling Weapon System Cost-Effectiveness
4.2.1.1 Weapon System Cost-Effectiveness in PBL
The goal and objective of AMC is to control system cost-effectiveness. How weapon system
cost-effectiveness is achieved depends on the management control strategy. De Leeuw
[2002] defined requirements for an effective management control system. These
requirements are the basis for AMC. In AMC control over cost-effectiveness is achieved by
the LCM systems approach. Control over system logistic process (or product support
processes) results in control over system cost-effectiveness.
The products support strategy for weapon systems can vary between the traditional
approach (transaction based) at one end and Performance Based Logistics (buying
outcomes: weapon system performance) on the other end. In the traditional approach logistic
processes are performed within the government (internal focus). From a government
perspective, the PBL product support strategy has an external focus by contracting weapon
system performance and outsourcing the product support functions to a contractor, the PSI.
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With a PBL product support concept control over system cost-effectiveness is achieved by
the way PBL is contracted. By making the PSI accountable for weapon system performance
and incentivizing performance it is assumed that the PSI decision-making process is aimed
at achieving these performance levels in the most cost-effective way over the total life cycle
of the weapon system. This should lead to increased availability and lower costs. From a
government perspective the following should be considered:
� PBL contracting period. PBL requires long term contract between the customer and
the PSI to assure long term investment in the cost-effectiveness of the weapon
system [Beggs et al, 2005]. Literature also indicates that industry proposes 3 to 5
year contracts. This limited period, from a weapon system life cycle perspective, is
coupled to the general Return on Investment (ROI) periods in industry. This might
conflict with the total life cycle perspective (system cost-effectiveness) of AMC. PSI
decision-making should be based on system cost-effectiveness over the total life
cycle (utilization) and not over the contracting period (3 to 5 yrs.). The government
needs to assure that decision-making on weapon system product support takes into
account weapon system performance and LCC over the total life cycle of the weapon
system which is usually more than 30 yrs. for complex systems like an air-based
weapon system.
� Dependency. Due to the complexity and the procurement costs of an air-based
weapon system the design organization has the knowledge concerning the weapon
system, its logistic support concept and has the data-rights. The high financial volume
for sustaining air-based weapon systems has increased the interest of industry in the
sustainment of these platforms which in turn has generated their interest in PBL
support concept. This has resulted in a limitation in product support options and
results in dependence one single contractor (PSI) for product support in a ‘full’ PBL
product support strategy.
� Sustainment Costs. The high costs of sustaining complex weapon systems (fleet of
military aircraft) results in a requirement to have control over these costs. As
mentioned in the introduction of this research the sustainment costs of complex
weapon systems over their total life cycle is more than 4 or 5 times the development
and production costs. The government needs to control costs for its taxpayers,
furthermore high taxpayer costs generates political interest.
Considering the above mentioned issues the owner’s risks, in this case the government and
specifically the NL MOD, must be minimized. The AMC approach provides insight in system
cost-effectiveness over the total system life cycle and can provide the required control over
system cost-effectiveness and by that minimize the risks on the government.
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In a PBL environment the logistic support process are primarily managed by the PSI. In this
context the government must be able to control weapon system cost-effectiveness. Owners
risk must be minimized by effectively managing and controlling PBL. The AMC approach is
used to provide effective management control. The LPC (figure 4.1) is the basis.
Figure 4.1 AMC in a PBL product support concept
The focus of PBL is customer satisfaction by delivering installation performance within the
available budget. The Performance Based Agreement (PBA) is the basis. The PSI is
managing all logistic support processes and is accountable for installation performance and
by that for system functionality. The focus of AMC is optimizing the balance between the
operational need, and the system functionality and budget. The WSM focus is on system
cost-effectiveness, installation performance and quality of the provided products and
services. By managing performance killers, cost drivers and subsequent change proposals
for improvement, system cost-effectiveness is controlled. The AMC essential requirements
as described in chapter 3 form the basis for the above mentioned approach.
Within the NL MOD, WSM defines the strategy to control weapon system cost-effectiveness.
The definition of WSM indicates that the focus is on realizing system effectiveness against
the lowest possible life cycle costs. In practice the management control strategy within the
NL MOD focuses on controlling logistic processes (HLD MatLog) and foremost budget
expenditure. An LCM systems approach is not used. A performance based management
approach is a future objective for managing NL MOD weapon systems [HLD MatLog, 2008].
The field study also indicates that the traditional product support strategy is dominant within
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the NL MOD with regards to air-based weapon systems (Cat A systems). Some experience
exists with PBL concepts for land vehicles (Cat B system).
The HLD MatLog is the basis for NL MOD WSM process (System Logistics): Sustaining
Materiel Readiness Management. Sustaining Materiel Readiness Management (or WSM) is
a tri-partite responsibility: system manager (WSD), maintainer (LCW) and the Operator
(RNLAF). The objective of WSM is controlling weapon system cost-effectiveness. The basis
is the Roadmap which provides insight in the requirements for weapon system performance,
operational and logistic planning and budget. Weapon system performance is measured at a
top level together with budget expenditure. As the LPC is the basis an assessment is made
based on the, for PBL, relevant LPC elements. The following is noticed when assessing the
NL MOD WSM process:
� Operational Need. The operational need of the defense organization is defined in the
AGCDS. The specifics for a weapon system are defined in the Roadmap and are
controlled by the tri-partite consultation structure.
� Budgets. The NL MOD has a strict separation between budget types. For WSM the
budget for investments (DIP), sustainment (DEP) and personnel are relevant. Control
over the investment budget is exercised by DOBBP, RNLAF and NL DMO for the
sustainment budget and HDP for personnel budget. HDFC has final authority over all
budgets and is responsible for financial control. Because WSM does not have control
over the WSM relevant budgets, WSM actors are restricted in increasing weapon
system cost-effectiveness. They do not control the decision-making process.
� Installation Performance. There is limited insight in performance killers and cost
drivers. At this time only top-level (weapon system level) insight in installation
performance is available. An information system to provide insight in system
performance (Logistic Decision Support System) is in development.
� Logistic Products and Services and Resources .The present process structure
focuses on traditional product support concepts. The HLD MatLog is not adapted to
PBL concepts.
Analysis Results:
� Goals and objective of AMC and WSM are identical. WSM is the military variant of
AMC.
� A weapon system in a PBL environment requires a management control approach
with a total life cycle perspective.
� Focus of AMC in a PBL product support environment is balancing the operational
need and the system functionality and budget.
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� Within the NL MOD traditional product support concepts are dominant, no experience
with PBL concepts with air-based (Cat A) weapon systems.
� NL MOD management control strategy focuses at controlling logistic processes and
budget expenditure.
� NL MOD WSM processes are structured on traditional product support concepts
� The NL MOD has limited attention for cost drivers and LCC, sufficient attention for
performance killers.
4.2.1.2 WSM Production Process
The previous paragraph defined the WSM process in a PBL environment based on the LPC.
The Asset Management Program specifies the objectives. The LCM systems approach is the
basis for the Asset Management Program. Based on the AMC objective the Logistic Program
is established. The Logistic Program contains all data and information to manage the logistic
process in the most cost-effective way [Stavenuiter, 2002]. This includes weapon system
requirements, weapon system structure, logistic plans and cost estimates. By specifying and
planning the required products, processes, actors, resources and budget, the logistic
processes are managed. The LPC is the basis. The PBL concept effects the programming
method as follows:
� Processes. The following processes are relevant: the logistic support process and
management control process. The PSI is responsible for the logistic support
processes. In a ‘full’ PBL concept product support is transferred to the PSI including
responsibility and authority over these processes. For an air-based weapon system,
logistic processes like weapon system operational readiness preparation, certain
maintenance processes and supply processes remain the responsibility of the
government. These processes have a direct relation with the operational output and
are, from a strategic perspective, not outsourced. Integration of these processes
between the PSI and the government is essential. The role of the government
changes to an oversight role, the management control process aimed at directing and
controlling system cost-effectiveness. The AMC production process is used as the
basis. Figure 4.2 shows the AMC production process adapted to the PBL
environment, from a government perspective.
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Figure 4.2 AMC in PBL production process
� Products. The prime product in a PBL construct (‘full’ PBL) is weapon system
performance. This is the objective of PBL. To achieve effective management control
the government requires insight in installation performance, product quality, PSI
service level, performance killers, cost drivers and change proposals to improve SCE.
The PBA must incorporate these requirements.
� Actors. In a PBL construct the actors and role of actors change. Paragraph 4.2.2
described the effects of PBL on the WSM actors, actor roles and WSM organization
structure.
� Resources. The PSI is primarily responsible for resourcing the logistic support
processes. For air-based weapon system resourcing on equipment maintenance, on-
base supply and operational readiness processes is the responsibility of the operator.
� Budget. Budget is provided by the government based on the operational need and
the costs per unit usage. For air-based weapon systems this is typically based on the
cost per flight hour (for a certain level of weapon system availability). PBL constructs
do affect budgeting form a government perspective: colors of money, limiting
budgeting flexibility. The unit usage is the basis for the budget which makes
budgeting straight forward and transparent compared to a traditional product support
environment.
The asset or WSM program in the NL MOD for air-based weapon systems is focused on
traditional support concepts. The Logistic Program within the NL MOD is laid down in several
documents. The bases are the policies and directives which are established to structure the
management of weapon systems: Defence Governance Model, HLD MatLog, WSM Policy
and WSM TOR’s. The System Plan contains the asset requirements and structure [NL DMO,
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2010]. The weapon system Roadmap contains the logistic plans and cost estimated/budgets
[RNLAF, 2011]. The System Plan en Roadmap is considered an adequate basis for WSM in
a PBL environment.
Air-based weapon systems require processes to maintain operational readiness which are
performed on a Main Operating Base (MOB) resorting under the OPCO (RNLAF). These
processes focus on preparing operational ready aircraft (servicing and weapon loading), on-
equipment maintenance (maintenance executed on an airbase) and on-base supply
processes. These processes are resourced by the RNLAF.
Weapon system requirements are determined in the planning and budgeting process. The
basis is the AGCDS which leads to Business Plans and a DVO between the operator
(RNLAF) and the service provider (NL DMO). Sustainment and investment (capabilities)
budget is assigned based on this process to NL DMO. Weapon system requirements are laid
down in the Roadmap. Management of the Roadmap is performed in the tri-partite
consultation structure between the operator, maintainer and system manager. The HLD
MatLog describes role in the WSM process. The LCM system approach is not adopted within
the NL MOD WSM approach.
Analysis Results:
� Weapon system performance is the prime product of the Asset Management
Program.
� Directing and controlling weapon system cost-effectiveness is the primary process for
the government.
� Asset Management Program within NL MOD has a traditional focus.
� The NL MOD System Plan and Roadmap are considered adequate in a PBL
environment.
4.2.1.3 Analysis and Control Tools
Effective management control requires sufficient insight in weapon system performance as in
performance killers and cost drivers. The LCM model approach (AMC) plays an essential
role as it provides the insight to control system cost-effectiveness. To secure system cost-
effectiveness and minimize the risk of the weapon system owner this approach is applied in
the PBL construct as described in paragraph 4.2.1.1. Effective management control requires
a model of the system (system to be managed and the management control system). In case
of managing weapon systems the LCM model provides insight in weapon system
performance and the performance of logistic processes (cost-effectiveness) as defined by
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Stavenuiter. The objective is controlling weapon system cost-effectiveness (figure 4.5).The
LCM model has a transparent breakdown of technical system and logistic processes.
Analyses tools must be available to assess weapon system performance and LCC. The
methods used must be agreed to by the actors. To assure that PSI decision-making is done
in a total life cycle perspective these analysis tools should provide insight in system
performance and LCC. AMC and PBL literature state that the information regarding weapon
system performance must be relevant and reliable and should be agreed upon by all
stakeholders. It must be based on an LCM model that provides a transparent breakdown
structure of the technical system and logistic processes. Figure 1.1 shows the required
information on a top-level.
Information and communication technology must provide insight in weapon system
performance to all stakeholders [Stavenuiter, 2002]. Stavenuiter defined an LCM dataset as
the basic information that is required. AMC uses Internet communication and information
technology as a basis.
Within the NL MOD the LCM model approach is not adapted. The weapon system roadmap
defines the baseline performance and budget. An LCC baseline is not established as WSM is
focused on budget expenditure. Performance is reported through monthly and quarterly
reports by NL DMO and RNLAF. Although cost models are in development to provide insight
in LCC in future, at this time rudimentary insight in LCC is only provided at a top level
(weapon system). The Logistic Decision Support System (LDSS) is in development to
provide insight in performance (availability reliability and maintainability) to a system and
subsystem level. Cost models and LDSS use legacy information system data. At this time
new business management software (SAP) is rolled out.
The NL DMO introduced SharePoint information portals to communicate information to all
relevant stakeholders (as a result of various WSM studies within the NL DMO). The portal
contains information like the Road Map, Service Level Agreements, performance reporting,
configuration management information, projects and budget information. NL DMO developed
a standard for system information portals. Business Management software for air-based
weapon systems is scattered over different information system prohibiting an integrated
overview of information (separate configuration management, maintenance management,
logistic and financial information systems). Based on the HLD MatLog new business
management software (SAP) is introduced that could provide relevant WSM information. The
capability of SAP pertaining to WSM is not known at this time.
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Analysis Results:
� Effective WSM requires an LCM model of the technical and logistic system to control
system cost-effectiveness.
� LCM models are not in use within the NL MOD for air-based weapon systems.
� Providing relevant and accurate information on weapon system performance is limited
because of the scattered information systems for business management within the
WSM field.
� LDSS provides insight in performance killers. Cost models are in development to
provide insight in LCC.
� There is no structured approach to identify cost drivers.
� Baseline performance metrics (weapon system performance) are available on a top-
level (Roadmap).
� The use of SharePoint satisfies AMC essential requirements with regards to
information and communication technology.
4.2.2 WSM organization structure
This paragraph contains the analysis on the WSM organization structure. The findings show
that the WSM organization structure depends on the actors in the LCM team and the
contingency factors as defined in organization theory literature.
4.2.2.1 LCM Team
AMC requires a permanently assigned LCM team to control weapon system cost
effectiveness. In the AMC approach, the LCM team consists of the designer, maintainer and
operator. The roles of actors in a PBL construct change. Based on the PBL management
concept of the US DOD the LCM team concept needs to be adapted to this concept. In a
PBL construct three prime roles are identified: Operator, PSI and PSM. These actors
manage all logistic support processes. In the AMC context, the designer and maintainer roles
are affected with the transfer of logistic support functions to the PSI. Annex B provides
insight in the transfer of logistic support function in the AMC field when introducing PBL
concepts. The basis is the required organizational functions in the sustainment phase.
Within the NL WSM concept no permanent LCM teams are assigned. WSM takes place in
the tri-partite consultation structure between the operator, system manager and maintainer.
WSM is exercised by these three prime actors: operator (RNLAF), maintainer (RNLAF and
LCW) and system manager (NL DMO/DWS/ASB). Support functions are provided within the
defined organization functionality. The introduction of PBL concepts also affects the WSM
actors. When product support functions are outsourced like in a PBL concept, organization
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functions are transferred from the NL MOD to the PSI. Based on the assessment of
organizational function transfer in the AMC field this assessment is also provided in the WSM
field. Annex B provides this assessment.
4.2.2.2 Contingency factors
The organization structure is affected by the contingency factors. Literature identifies three
factors: the organization strategy to realize the organization goal and objective, the
organization’s environment and the primary process.
Strategy. The organization structure must support achieving the organization goal and
objectives. In the case of managing a complex weapon system the product support strategy
will affect the structure of the government organization responsible for managing the weapon
system. A traditional product support strategy requires different organizational functions and
structure then a PBL product support strategy where organizational functions are transferred
to a PSI (Annex B).
Environment. In general the management of complex weapon systems is both complex in
technology as in organization and management [Ben-Ari and Chao, 2009]. Also Stavenuiter
(2002) indicates that the management of a capital asset is complex. This also applies to a
weapon system with a PBL product support concept. With a PBL product support strategy
the complexity of the AMC environment, from a government perspective can be reduced
depending on the level of PBL. With a ‘full’ PBL product support concept product support
risks are transferred to the PSI. With this transfer also product support functions are
transferred to the PSI. By transferring these products support processes, organization and
management complexity from a government perspective is reduced. When looking at the
overall AMC environment, this complexity still exists.
The AMC environment complexity affects the AMC management control system and the
management organization. Approaches like AMC are required to control weapon system
cost-effectiveness in a complex environment. By modeling the system, the weapon system
and logistic support system (LCM model), complexity is reduced (De Leeuw, 2002 and
Stavenuiter, 20020). A complex environment has a high demand on horizontal coordination
(between organization and departments) and requires decentralized decision-making [De
Leeuw, 2002, Mintzberg, 1994].
The NL MOD field study supports the findings from AMC and PBL literature. Air-based
weapon systems are characterized as complex systems from a technology perspective. This
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also applies to organization and management complexity within the NL MOD. As indicated in
paragraph 4.2.1 traditional support concepts are dominant within the NL MOD. For the main
air-based weapon systems (fighter aircraft and helicopters) product support functions are
performed within the NL MOD. A multitude of support contracts are managed as are internal
processes like System Support Engineering (SSE), Supply Chain Management (SCM),
intermediate and depot level maintenance. The number of actors involved in WSM is multiple
as indicated in figure 4.4. It shows the actors from a WSM perspective divided in the three
prime WSM actors: the operator (RNLAF), maintainer (LCW) and System Manager (WSD).
Figure 4.3 Actors in NL MOD WSM
From an organization and management perspective the NL MOD WSM environment can be
characterized as complex.
Process. The WSM process is characterized as a reciprocal technology (organization
technology). According to Thompson [De Leeuw, 2002 and Daft, 2007] reciprocal
interdependence occurs when providing various products or services in combination to a
customer. The management of a weapon system provides various products (spare parts,
engineering support etc.) to the operator of a weapon system. Reciprocal interdependence
requires high demand on horizontal coordination and mutual adjustment as a coordinating
mechanism. This requires a horizontal organization structure [De Leeuw 2002, Daft 2007 and
Mintzberg, 1989].
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Analysis Results:
� AMC environment is complex from a technical, organizational and management
perspective.
� NL MOD WSM environment is complex from a technical, organizational and
management perspective.
� The transfer of organization functions and management functions with a PBL product
support strategy can reduce organization and management complexity from a NL
MOD perspective,
4.2.2.3 Organization Structure
As concluded in the previous paragraph the LCM team in a PBL construct consists of the
Operator, PSM and PSI. Two of these actors are the government actors: operator and PSM.
As AMC states a permanently assigned LCM team must be established to support effective
AMC. Stavenuiter (2002) proposes a matrix or project organization structure to support AMC.
The organization structure depends on the contingency factors strategy, environment and the
primary process. The PBL product support strategy results in a transfer of functions to the
PSI. Furthermore it transfers the focus from managing the internal environment to an
external environment. Literature indicates that an organization strategy focused on the
external environment is best supported by horizontal organization structures. The complexity
of the WSM environment results in a high demand on horizontal coordination (between
actors) and decentralized decision-making [Mintzberg 1993 and De Leeuw 2002].
The WSM process was characterized as reciprocal requiring extensive coordination between
actors. The organization structure needs to support horizontal coordination and decentralized
decision-making. According to Mintzberg (1993), De Leeuw (2002) and Daft (2007) a
complex environment is effectively supported by a horizontal organization structure like a
project, matrix or network organization structure. Also the introduction of integration functions
and vertical information system support the requirement for horizontal coordination and
decentralized decision-making [Daft, 2007].
NL MOD organization structure. The DGM is the basis for the organization structure. The
main (top) structure is functionally based: policymaking, execution (Operational Command),
financial oversight (HDFC) and support (NL DMO and CDC). NL DMO has different
directorates which have a divisional structure (Logistic Establishments and Weapon
Systems). The Weapon System Directorate has a divisional structure (Land, Sea and Air
branch). The WSD’s consists of a system management, type management and
maintenance-engineering department. Most WSD´s have liaison functions at OEM and/or
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partner nation sites for logistic support. Required functions in support of the WSD functions
are provided by various departments within the NL DMO and CLSK. The WSD has a
functional organization structure. The organization structural configuration is characterized as
a vertical organization structure.
NL MOD WSM structure. The three prime actors in WSM of air-based weapon systems are
the operator (CLSK), the maintainer (LCW) and the system manager (WSD). Each actor
fulfills its function in WSM. CLSK operates the aircraft and sets the operational requirements.
LCW is functioning as the maintenance (intermediate and depot level) organization and
provides a supply chain management (SCM) function. The WSD is responsible for the
logistic support and weapon system standards framework (maintenance, logistics and
configuration). The NL MOD WSM structure is characterized as a vertical structure.
Furthermore the organization structure is adapted to traditional product support environment.
The introduction of PBL will affect the product support functions currently performed within
the NL MOD WSM actors. Maintainer and system manager product support function will
transfer to the PSI in a PBL construct.
Analysis Results:
� WSM requires an organization structure that support high demands on horizontal
coordination and decentralized decision-making. This requirement can be supported
by horizontal organization structure like project or matrix organization, information
systems and by establishing integration (liaison) functions.
� LCM team in a PBL concept should include: the operator, PSI and PSM.
� The transfer of organizational functions affects the NL MOD organizations involved in
WSM. Product support functions are transferred to the PSI.
� Permanently assigned LCM teams do not exist within NL DMO.
� The NL MOD organization has a vertical organization structure.
� The introduction of PBL within the NL DMO will affect the organization structure
because product support functions will transfer from NL MOD to the PSI.
� PBL affects the organization structure because of the transfer of product support
functions from the government to the PSI.
4.2.3 WSM Responsibility and Authority
PBL literature specifically references responsibility and authority as an important organization
structural characteristic that is affected by PBL. Let’s first define the terms responsibility,
authority and accountability. The Business Dictionary (2011) defines these terms as follows:
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- Responsibility. A duty or obligation to satisfactorily perform or complete a task that one
must fulfill and which has a consequent penalty for failure.
- Authority. Power that is delegated formally. Institutionalized and legal power inherent in a
particular job, function or position that is meant to enable its holder to successful carry
out his or her responsibilities.
- Accountability. The obligation of an individual or organization to account for its activities,
accept responsibility for them, and to disclose the results in a transparent manner.
First the PSI needs sufficient responsibility and authority over logistic support processes for
PBL to be effective. Secondly literature indicates that prime responsibility should be assigned
to one actor, in PBL this actor is referred to as PSM. The PSM is accountable for weapon
system performance. Organization literature supports this statement. De Leeuw (2002)
states that for an effective organization the responsibility and authority of the organization
must be balanced. When responsibility and authority are not balanced and matched to the
organizational functions the effectiveness of the organization is affected in a negative way.
Within the NL MOD, responsibility and authority are coupled to the functional structure of the
organization and is dispersed throughout the NL MOD organization. Responsibilities related
to WSM activities are based on the function of a department in the organization. The HLD
MatLog provides the structure (Annex A). Managing the sustainment of materiel readiness is
a WSM (three party: operator, maintainer and system manager) responsibility as far it relates
to the logistic support processes. The System Manager (the WSD) is contributing to the
WSM process by managing the logistic support and technical system standard framework of
the weapon system. The responsibility and authority of the WSD is further discussed in
paragraph 4.2.6. Not all authority and responsibility lies with the three actors in the WSM
construct. Planning and control, personnel, financial control and procurement are a
responsibility of other directorate in the NL MOD.
Analysis Results:
� Within the US DOD concept one single entity, the PSM, is accountable for the WSM
process (directing and controlling system cost-effectiveness).
� For an organization to be accountable the organization’s responsibility and authority
must match and be in balance.
� Within the NL MOD WSM concept WSM is a tri-partite responsibility
� Responsibility and authority are not in balance in the WSM field.
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4.2.4 WSM Core Competence
AMC requires skilled LCM teams with skilled actors. Knowledge in team management,
system (support) engineering, process management and management control is required
[Stavenuiter, 2002]. In a PBL support environment, knowledge of PBL and PBA´s is
essential. This knowledge must be distributed through the entire organization. A basic
prerequisite for PBL is the close cooperation between the government and the PBL provider.
Team management is therefore also of importance to PBL. The PBL support concept is a
performance based environment. Knowledge concerning performance management is
required to effectively manage the PBA and the PBL provider. The transfer of organizational
functions in relation to logistic support processes in a PBL environment has an effect on the
knowledge and skill within the government. According to Koevoets (2008) also in a PBL
environment knowledge concerning PBL, weapon system utilization, and the weapon system
itself, is required from a government perspective. Sufficient knowledge of the weapon system
and its utilization within government must be maintained in order to be effective.
Earlier research within the NL DMO in the required knowledge and skill to manage a weapon
system concluded that insufficient academic knowledge on logistic engineering was available
within the NL DMO [WSM Pilot Program, 2007]. Further research (WSM Pilot Part 2, 2009)
within the NL DMO to the required knowledge and skills concluded that at least knowledge
and skills are required in 10 different areas. WSM, financial management and configuration
management are indicated as most important. Different competence levels are defined (4)
ranging from a level able to apply the defined knowledge/competence area’s to an academic
level. In 2010 an introduction WSM training program was established based on the WSM
pilot results [Introduction WSM training, 2010]. This training program does include PBL
support concepts but is very limited. As PBL effects the entire organization and required
knowledge PBL should have a more prominent role.
When assessing the effect of PBL on the core competence of the organization three aspects
seem relevant: PBL knowledge and experience within the present organization, the effects of
PBL on the core competence of the organization and the effects of PBL on MAR-21
requirements.
PBL Knowledge and Experience. At this time none of the air-based weapon systems or
subsystems has a PBL support concept. Experience in other DWS branches with PBL (on
Category A systems) is also limited [PBL Vision Document, 2010]. There is only theoretical
knowledge in PBA constructs as in managing (management control) cost-effectiveness in
such an environment.
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Effect of PBL on Core Competence of organization. By outsourcing a significant part of
logistic processes and support functions there is a risk that the required level of skill in
relation to these support functions is no longer available within the government. As
Stavenuiter (2002) argued a certain level of knowledge is required to be able to effectively
manage weapon systems also in a PBL support environment. A minimum level of knowledge
is required to act as a competent operator of air-based weapon systems. The NL MOD has
aspiration to act as smart buyer/smart maintainer/smart operator [WSM Vision, 2009 and
TNO, 2007]. A certain level of knowledge is required to guarantee the system safety,
maintain control in the outsourcing process, maintain an equal position with the PSI in a PBL
construct, keep options open for alternative support strategies and support the operational
environment [PBL Policy Vision, 2010].
Effect of PBL on MAR-21. The MAR-21 is responsible for the weapon system type design.
The MAR’s require a certain level of knowledge and skill in the MTCHO to fulfill the MAR-21
requirements (MAR-21-237). This pertains to knowledge about the technical system
(aircraft), its support system and airworthiness of the system. The MAR’s specifically refer to
knowledge concerning human factors in relation to the aerospace field. An investigation into
the crash of a UK Nimrod aircraft showed that insufficient knowledge on the part of the
government (departments responsible for airworthiness of the aircraft) contributed to the
causes of this crash. In this case system support engineering functions were outsourced
which resulted in insufficient knowledge on the government part to adequately address
airworthiness issues.
Analysis Results:
� Managing a weapon system in a PBL environment requires skilled actors (operator,
system manager) in the weapon system (technical system), its utilization, system
support engineering, PBL, team management and management control.
� NL WSM knowledge focuses on traditional product support approaches
� Maintaining sufficient knowledge within the government in a PBL construct is a
challenge
4.2.5 WSM Organization Culture
The organization culture must support the organization structure and environment [Cameron
and Quinn, 1999]. Within an organization culture, subcultures within teams or departments
can exists which differ from the overall organization culture. In the context of this research
the organizational culture of the government is considered as important and specifically the
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government entity which has WSM responsibilities. Typically, government organizations are
dominated by a hierarchy culture [Cameron and Quinn, 1999]. The hierarchy culture is
characterized by a large number of standardized procedures, multiple hierarchical levels and
an emphasis on rule enforcement [Cameron and Quinn, 1999]. Typical characteristics of
AMC, in relation to cultural dimensions, are: learning organization, (LCM) team approach,
and the use of skilled and experienced actors. These characteristics require a more
clan/group dominated culture [Cameron and Quinn, 1999]. Other characteristics of AMC
direct a more market oriented culture like the emphasis on control/results. The focus on
information (management) and complex, cost intensive assets in a complex environment
direct a more adhocracy cultural type. The focus in PBL is on performance (results) which
supports a more market cultural type. In PBL, cooperation (trust) between the PSI and the
government is essential. This can be effectively supported by a clan dominated culture.
The NL MOD is a military organization. Typically, a government/military organization is
dominated by a hierarchy culture [Cameron and Quinn, 1999]. Evidence for a hierarchy-
dominated culture is the large number of standardized procedures and multiple hierarchy
levels. The NL MOD is a large (70.000 people) organization with multiple hierarchy levels
(6+) and a large number of standardized procedures. Based on these characteristics it can
be concluded that a hierarchy organization culture is dominant within the NL MOD. The
findings show that a more market and clan cultural type is required to support the objective of
WSM for weapon systems with a PBL support concept. WSM in a PBL environment is a
cooperation of different government organizations and industries with their own cultures.
Organization culture is very specific for an organization, it is difficult to characterize and
difficult to change [Boonstra, 2006]. A preliminary conclusion can be drawn that a cultural
change is required (hierarchy to a more market/clan dominated culture). When introducing a
PBL concept the existing culture and required organization should be characterized.
Because organization culture is difficult to assess, further research is recommended in
determining the existing and required organization culture in support of WSM in a PBL
environment.
Analysis Results:
� Organization culture needs to support the organization strategy and organization
structure.
� The analysis indicates that a more market and clan dominated organization culture is
required.
� A preliminary assessment of the NL MOD organization culture indicates a hierarchy
dominated culture.
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4.2.6 WSD Organization
WSD Function. Within the NL MOD WSM concept the prime objective of the WSD is
controlling materiel performance according to the HLD MatLog [2008]. The WSD is
responsible for the standards framework with respect to the weapon system, the logistic
support system and LCC. In the NL MOD WSM approach the system manager is not only
responsible for the standards framework but also for providing logistic products and services.
At present the WSD provides sustainment support contracts (services and materiel), system
support engineering services and project management services. Furthermore the system
manager is the MTCH and maintains the weapon system MTC. In the present WSM concept
a number of these logistic products and services are the responsibility of the operator.
Responsibility and Authority. Controlling materiel readiness implies that a process structure
is in place to support that process. An audit function for the WSD in the operator domain is
identified as a future objective of the HLD MatLog. As discussed previously WSM is a tri-
partite responsibility. The standards framework is set in the WSM tri-partite consultation
structure. The responsibility and responsibility for the MTCH function is clearly defined and
structured. The MAA grants privileges to the MTCH based on an MAA approved MTCH
Organization Exposition (MTCHOE). Responsibility for the MTC has to be structured within a
NL MOD organization as defined in the MAR-21. The MAR-21 requirements also affect the
PBL product support concept. Because the MAR-21 responsibility and authority can only be
assigned to a NL MOD organization prohibits the transfer of certain product support functions
to the PBL provider.
WSD organization structure. In a PBL concept product support functions are transferred from
the government to the PSI. This transfer of functions also affects the WSD because the WSD
is responsible for a number of support functions.
Analysis Results:
� WSD is responsible for the standards framework and the MTC.
� The WSD provides logistic products and services which are the responsibility of the
operator in the present WSD concept.
� The transfer of product support functions to the PSI affects the WSD.
� MAR-21 prohibits transfer of product support functions to PBL provider.
� MAR-21 responsibility and authority are clearly assigned and defined.
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4.3 Problem Specification
Based on the findings in paragraph 4.2 the key issues are identified and a problem
specification is developed.
The analysis results show that LCM systems , as applied in the AMC approach, is required to
control weapon system cost-effectiveness in a traditional product support concept and as
well in a PBL product support concept. The requirements for effective control of De Leeuw
(2002) and for capital assets specifically the pre-conditions for effective control from
Stavenuiter (2002) are required to effectively manage a system (weapon system). The LCM
systems approach is not adopted in the existing NL MOD WSM concept. LCM models of the
weapon systems and its logistic support processes, based on the technical and logistic
breakdown structure are not in use, as a structured approach, to identify performance killers
and cost drivers. Insight in weapon system performance and costs is only available on a top
(weapon system) level. This leads to the following problem specification:
1. The lack of an LCM systems approach in the NL MOD WSM concept limits effective
control of weapon system cost-effectiveness
The environment and process for managing an air-based weapon system results in a high
demand in horizontal coordination and decentralized decision-making. Furthermore AMC
asked for a permanently appointed LCM team, preferably in a project or matrix organization
structural configuration. The NL MOD organization structure has a vertical organizational
configuration (functional and divisional). This also applies to the way WSM is organized.
WSM teams are not permanently appointed teams as required in AMC. A vertical
organization configuration does not support the high demand on horizontal coordination and
decentralized decision-making which is required in a WSM environment.
2. The existing NL MOD WSM organization structure is not adapted to the WSM
environment and the WSM in PBL process and limits the effectiveness of the NL
MOD WSM organization.
Furthermore, the transfer of organization functions which comes with the introduction of PBL
product support concepts will affect the existing organizational functions in the WSM field
which are based on traditional support concepts for air-based weapon systems. This
specifically applies to the WSD organization. A significant part of the organizational functions
in the WSD will transfer to the PSI. This leads to the following problem specification:
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3. The WSD organization structure is not adapted to a PBL product support concept.
Organizations in general and PBL specifically requires a balance between responsibility and
authority for an organization to be effective. Managing PBL requires a prime entity (within the
US DOD concept the PSM) that is responsible and has authority over weapon system
performance and is managing the PSI. In the NL MOD WSM concept, WSM authority is a
three party concept while responsibility is connected to organizational functions.
4. Responsibility and authority in the WSM field is not balanced leading to decreased
effectiveness of the WSM organization.
The WSD is responsible for a significant part of the product support functions in the NL MOD
WSM concept while the WSD has no authority over these product support functions.
5. The WSD authority and responsibility is not adapted to the PBL product support
concept.
In addition the PSI requires sufficient responsibility and authority over logistic processes to
effectively managing PBL. The MAR-21 provides restrictions with structuring responsibility in
a PBL construct. Delegation of MAR-21 responsibilities to an organization outside the NL
MOD organizational is not allowed.
6. The MAR-21 requirements prohibit the transfer of product support functions with
corresponding responsibility and authority to the PSI.
The PBL concept will change the roles within the NL MOD WSM tri-partite construct requires
a different set up of the consultation structure within the NL MOD WSM approach. The
existing WSM concept and consultation structure is constructed on traditional product
support concept and has an internal focus. In a PBL concept the maintainer role within the
NL MOD is fully integrated in the PSI role. WSD and operator (MAR-OPS/Subpart M) product
support functions are partly transferred to the PSI as well. The PSI has a prime role in PBL
and needs to be incorporated in the consultation structure. Prime responsibility in the tri-
partite consultation structure must be assigned to the prime entity responsible for managing
the PSI.
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7. The existing WSM consultation structure is not adapted to a PBL product support
concept.
WSM in a PBL product support concept requires skills in PBL concepts and management
control. Within the NL MOD, specifically in the air-based weapons system field, the
experience with PBL concepts is limited. Management control (controlling system cost-
effectiveness) is limited to traditional support concepts.
8. There is insufficient knowledge and experience in PBL concepts for air-based
weapon systems within the NL MOD.
With a PBL product support concept, product support functions are transferred to the PSI. As
a result of this transfer of product support functions also the subsequent skill to execute
these functions is transferred to the PSI. The government must retain sufficient knowledge
and skills to effectively manage weapon system performance and to comply with the
applicable MAR. Within the NL MOD retaining knowledge and skill refers to the smart
buyer/smart maintainer concept. Maintaining sufficient knowledge and skill in a PBL
environment is a challenge. For the WSD specifically knowledge of the weapon (technical)
system is required to manage the weapon system MTC.
9. Maintaining sufficient knowledge and skills on the weapon system, its utilization and
logistic support within the NL MOD for WSM in a PBL product support concept is
difficult.
Considering the identified key issues the following improvement factors can be identified for
managing an air-based weapon system with a PBL product support concept:
1. effective control of weapon system cost-effectiveness
2. effective WSM and WSD organization structure
3. responsibility and authority structure
4. WSM consultation structure
5. WSM knowledge and skills.
4.4 Terms of Reference
The previous paragraph identified the key issues and the subsequent improvement factors in
relation to the research question. The assessment of the TOR’s is based on the analysis and
problem specification in the previous paragraphs. The TOR’s contain the requirements that a
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future WSM and WSD organization design within the NL MOD must meet to effectively
control weapon system cost-effectiveness in a PBL environment. The objective is controlling
weapon system cost-effectiveness. The TOR’s are structured based on the improvement
factors as defined in the problem specification.
1. Effective Control Weapon System Cost-effectiveness
The problem specification determined that the lack of an LCM systems approach limits the
control of weapon system cost-effectiveness within the NL MOD WSM concept. As the
analysis indicated AMC can be applied to control weapon system cost-effectiveness in a PBL
environment. To control system cost-effectiveness an LCM systems approach is required to
provide insight in system effectiveness and cost. A program must be established to
determine performance killers and cost drivers for improving weapon system cost-
effectiveness.
� Adopt AMC approach to manage weapon system cost-effectiveness
2. Effective WSM and WSD Organization Structure
The existing NL MOD organization structure is not adapted to the high demands in horizontal
coordination and the requirement for decentralized decision-making that the WSM
environment and the WSM process require. The existing organization has a hierarchical set-
up. This hierarchical configuration is required to manage a large organization like the NL
MOD [De Leeuw, 2002]. The NL MOD WSM organization structure needs to be adapted.
This can be done by creating integration functions between organizations, information
systems or creating a horizontal organization structure like a matrix or project structure. In
this organization structure essential WSM organizational functions should be incorporated.
Also adapt the organization to support weapon systems with a PBL product support concept
taking into account the requirement for PSM functionality and a transfer of product support
functions to the PSI.
� Adopt a horizontal WSM organization structural configuration to support WSM in a
PBL construct.
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WSM in a PBL construct requires coordination between the PSM, PSI and operator. These
actors operate in the same complex WSM environment and process that puts a high demand
on horizontal coordination and decentralized decision-making. The coordination between the
government entity (PSM and operator) and the PSI can be supported by creating integration
function.
� Create integration functions to support coordination between the government and the
PSI.
The role of the WSD depends on the WSM concept and the organizational function that are
transferred to the PSI. The WSD function depends partly on the selected WSM concept and
can differ per weapon system. The WSD organization structure should support its intended
function within the NL MOD WSM construct.
� Adapt the WSD organization structure to the intended function in the NL MOD WSM
concept
3. Responsibility and Authority structure
The problem specification states that one single organization entity should have the
responsibility and authority to direct and control weapon system cost-effectiveness in a PBL
product support concept (in the US DOD concept the PSM). For this organization entity to be
effective, responsibility and authority should be balanced and matched to the functionality of
this organization. Therefore WSM responsibility and authority should be assigned to one
single actor within the NL MOD WSM organization.
� Assign WSM responsibility and authority to one single actor within the NL MOD WSM
concept
Depending on the role of the WSD in the NL MOD WSM approach the WSD responsibility
and authority need to be balanced and matched to the function of the WSD organization.
� Assign and match the WSD responsibility and authority to the WSD organizational
function.
4. WSM Consultation Structure
The present WSM tri-partite consultation structure has an internal focus. In PBL, the PSI role
can be executed by a contractor as well as the government. The WSM consultation structure
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should incorporate the PSI role. Prime responsibility and authority in this consultation
structure must be assigned to one single actor in accordance with the previous TOR. Adapt
tri-partite consultation structure (and underlying consultation structure) to the WSM in PBL
environment by incorporating PSI and assign responsibility and authority to one single actor.
� Adapt the NL MOD WSM consultation structure to the PBL environment. Include the
PSI in the WSM consultation structure and assign WSM responsibility and authority to
one single actor.
5. WSM knowledge
Managing a weapon system in a PBL construct requires additional skills: PBL/PBA and
management control knowledge. These subjects should be made an integral part of the
WSM training classes which are provided at this time.
� WSM actor skills in PBL and PBA concepts and in management control in a PBL
concept are required.
Maintaining knowledge on the weapon system, its utilization and logistic support is a
challenge in a PBL environment. NL DMO should maintain a proficiency level in the weapon
system, weapon system utilization, system support engineering and logistic support
engineering. Organize the WSM field to maintain WSM core competence in a PBL
environment.
� The NL MOD WSM field must be organized to maintain skill in the weapon system
(technical), weapon system utilization, system support engineering and logistic
support engineering in a PBL product support concept
Organization Culture and Style are relevant for an effective organization. Because
organization culture is difficult to assess and change, organizational cultural aspect not in the
scope of this research and are recommended for further research.
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5 DESIGN
5.1 Introduction
This chapter contains the conceptual design of the WSD organization for an air-based
weapon system with a PBL support concept within the NL MOD. In order to design the WSD
the role of the NL DMO and subsequently the role of the WSD within the NL MOD WSM
concept must be defined. As mentioned in Chapter 2, the F-35 (Joint Strike Fighter) might be
the first Cat A weapon system within the NL MOD with a ‘full’ PBL support concept and is
used as a case study subject in this research. Paragraph 5.2 determines the design
approach. The design phase starts with developing the F-35 WSM concept focusing on the
objective of WSM, controlling weapon system cost-effectiveness (paragraph 5.3). The F-35
WSM concept provides the input to develop the NL MOD WSM organization (paragraph 5.4).
The role of the WSD is determined in paragraph 5.5. One of the design principles and
requirements of De Leeuw is the participation of stakeholders in the design [De Leeuw,
2002]. Paragraph 5.6 contains the reflection with stakeholders of the conceptual WSM and
WSD design.
The introduction of the F-35 within the NL Defense organization is expected around 2019
pending the final decision to replace the F-16 fighter. The F-35 is in the System Design
Development (SDD) phase as in the Production Sustainment and Follow-on Development
(PSFD) phase. This concurrency in life cycle phases is also applicable in the development of
the F-35 sustainment concept. As the first aircraft start operations at this time the
development of the system and sustainment concept is still in progress. The fact that the
sustainment concept has not fully materialized affects the design of the conceptual NL F-35
WSM concept and WSD organization. This case study will also identify recommendation to
support the development of the F-35 sustainment concept.
The F-35 Air System (AS) consists of a weapon system but also a training and support
system including the F-35 business management and support software (Autonomic Logistic
Information System). This research focus of WSM is on the weapon system (Air Vehicle)
itself and does not include the training system. It is recognized that the AS also incorporates
the training system and that the training system could be incorporated in the WSM approach
according to the proposed enlarged AMC scope as mentioned by Stavenuiter (2002). An
enlarged WSM scope for the F-35 Air System is proposed as further research.
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The requirements in the TOR are the basis for the design phase. The WSM and WSD design
uses AMC as the starting point. As identified in the TOR’s, AMC is applied to control weapon
system cost-effectiveness in a PBL environment. Annex D shows the AMC business
realization. This six step approach is used to organize WSM for the F-35 weapon system.
5.2 Organizing F-35 WSM
5.2.1 Get Organized
The system elements and data and products flow for managing the F-35 weapon system
need to be structured. Stavenuiter (2002) defines four elements:
1) Functional Breakdown structure of the technical system (paragraph 5.3.1.1)
2) The Logistic Process structure (paragraph 5.3.1.2)
3) Structuring the LCM team (paragraph 5.3.1.3)
4) The information and communication system (paragraph 5.3.1.4)
5.2.1.1 F-35 Air Vehicle (AV) Functional Breakdown Structure
This step requires a functional breakdown of the AV. A functional breakdown of the AV is
already in development within the F-35 program. In the F-35 program, the Operational
Requirements Document (ORD) defines the required missions to be executed with the F-35
[US Services, 200X]. Based on these missions the mission types are defined. To define the
Mission Capability of the AV a Mission Essential Function List (MEFL) is developed. This
MEFL couples F-35 systems, subsystems, function level, Line Replaceable Component
(LRC) and sub-LRC to a mission type with Equipment Operational Capability (EOC) codes.
The following mission types are defined:
� Optimum Performance Capable (OPC) Mission
� Full Mission Capable Mission
� Air to Air Mission
� Air to Ground Mission
� Strike Fighter Mission
� Expanded Mobility Mission
� Instrumental Meteorological Conditions (IMC) Mission
� Safely Flyable (Visual Meteorological Condition, VMC) Mission
Information from the Off Board Prognostic Health Management (OBPHM) system and the
Computerized Maintenance Management System (CMMS) is provided to the MEFL structure
to determine mission capability. Mission capability status links to the performance metrics as
defined in the PBA. Performance is measured and monitored by the Sustainment
Performance Management System (SPMS).
Petrick Spitters
The basic MEFL and the mission capability types are still in development as is the MEFL per
F-35 variant. The MEFL provides a structured appr
structure of the AV. The MEFL must be scoped for the purpose in this case WSM in a PBL
construct concerning the depth of the breakdown structure. The AV subsystem level
(installation performance) is sufficient for the purpo
the weapon system.
Design Results:
� The MEFL concept must
F-35 weapon system (Air Vehicle).
5.2.1.2 Logistic Process Structure
This step defines the Logistic Proce
defined per installation/system level. In the PBL concept the logistic process structure is
simplified compared to traditional support concepts. The actors in the F
management approach are based on the US DOD PBL product support business model as
described in figure 3.2. The JSF Program Executive Officer (PEO) has the program manager
role and the JSFPO Director of
the PSI’s for respectively the propulsion system and Air Vehicle. Both PSI’s are supported by
Products Support Provider’s (PSP). These PSP’s can be from industry or a government
depot facility (global). Based on this concept an Actor Relation Definition is constructed. In
the F-35 program two prime actors are defined: LMAero (PSI for the Airframe) and P&W (PSI
for the propulsion system). Two support actors are identified: the
PSI’s) and the operator of the aircraft related to aircraft operational readine
activities, organizational level maintenance and on
control actor is the PSM (JSFPO). The actor relationship model for the F
system is defined as in figure 5.
58
The basic MEFL and the mission capability types are still in development as is the MEFL per
35 variant. The MEFL provides a structured approach to the functional breakdown
structure of the AV. The MEFL must be scoped for the purpose in this case WSM in a PBL
construct concerning the depth of the breakdown structure. The AV subsystem level
is sufficient for the purpose of the MEFL in relation to managing
must be used to develop a functional breakdown structure of the
35 weapon system (Air Vehicle).
Logistic Process Structure
This step defines the Logistic Process Structure. The prime, control and support actors are
defined per installation/system level. In the PBL concept the logistic process structure is
simplified compared to traditional support concepts. The actors in the F-35 sustainment
are based on the US DOD PBL product support business model as
described in figure 3.2. The JSF Program Executive Officer (PEO) has the program manager
role and the JSFPO Director of Sustainment (DoS) has the PSM role. P&W and LMAero are
ctively the propulsion system and Air Vehicle. Both PSI’s are supported by
Products Support Provider’s (PSP). These PSP’s can be from industry or a government
depot facility (global). Based on this concept an Actor Relation Definition is constructed. In
35 program two prime actors are defined: LMAero (PSI for the Airframe) and P&W (PSI
for the propulsion system). Two support actors are identified: the PSP’s (managed by the
PSI’s) and the operator of the aircraft related to aircraft operational readine
activities, organizational level maintenance and on-base (last mile) supply activities. The
control actor is the PSM (JSFPO). The actor relationship model for the F-35 Air Vehicle
system is defined as in figure 5.1.
Figure 5.1 Actor Defi
AMC MSc
The basic MEFL and the mission capability types are still in development as is the MEFL per
oach to the functional breakdown
structure of the AV. The MEFL must be scoped for the purpose in this case WSM in a PBL
construct concerning the depth of the breakdown structure. The AV subsystem level
se of the MEFL in relation to managing
be used to develop a functional breakdown structure of the
ss Structure. The prime, control and support actors are
defined per installation/system level. In the PBL concept the logistic process structure is
35 sustainment
are based on the US DOD PBL product support business model as
described in figure 3.2. The JSF Program Executive Officer (PEO) has the program manager
role. P&W and LMAero are
ctively the propulsion system and Air Vehicle. Both PSI’s are supported by
Products Support Provider’s (PSP). These PSP’s can be from industry or a government
depot facility (global). Based on this concept an Actor Relation Definition is constructed. In
35 program two prime actors are defined: LMAero (PSI for the Airframe) and P&W (PSI
(managed by the
PSI’s) and the operator of the aircraft related to aircraft operational readiness preparation
base (last mile) supply activities. The
35 Air Vehicle
Actor Definition Model F-35
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The logistic process structure requires a cost structure. The cost structure for the F-35 is
based on the PBL arrangement: cost per flight hour for an agreed level of performance
(PBA). Assigning costs in a PBL concept to a system/installation is difficult because the PSI
is contracted based on a cost per flight hour for the F-35 weapon system. To ensure cost-
effectiveness (over the total life cycle) of the F-35 weapon system is necessary to gain
insight in cost drivers and subsequently it is required to assign costs, which an actor
generates, to a system/installation. The PSI (PBL provider) needs to provide this insight in
costs. The cost structure is further explained in paragraph 5.3.1.4.
Design Results:
� A general actor definition model is determined based on the PBL product support
approach.
� Assigning costs an actor generates to a system/installation needs a special
arrangement with the PSI’s.
5.2.1.3 F-35 LCM Team
The F-35 sustainment concepts defines the roles and responsibilities of the different actors
based on the US DOD PBL management approach [PSM Guidebook, 2011]. The NL MOD
WSM approach must adapt to the F-35 sustainment management. Annex E of this research
discusses the role of the JSFPO concerning F-35 sustainment management. In the F-35
performance-based management concept JPO has the program management and PSM role
for the global F-35 fleet. The F-35 program management governance structure secures the
involvement of the partners in the program and their influence on sustainment management,
strategies, policy and plans through the advisory groups and councils (SAG, ALAC and
JESB). The JSFPO Director of Sustainment (DoS) is the F-35 PSM and is accountable for
weapon system performance. The PSM directs and controls weapon system cost-
effectiveness. Figure 5.2 shows the F-35 global fleet LCM team from a sustainment
perspective.
Figure 5.2 F-35 LCM team
JSFPO/DoS
Participant LMAero and P&W
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LMAero and P&W are identified as the PSI’s and are accountable for weapon system
performance. The participants are the Services operating the F-35 weapon system.
The NL MOD is responsible for WSM of the NL F-35 fleet. This responsibility is exercised
through the JPO. The NL F-35 WSM organization and integration with the global sustainment
organization is described in paragraph 5.4.
Design Results:
� The global F-35 fleet LCM team consists of the JSFPO PSM, the PSI’s and the
respective F-35 weapon system operators.
5.2.1.4 Information and Communication
The required management information is defined and the way this information is
communicated. Information systems can support the high demand on horizontal coordination
and decentralized decision-making in a WSM environment.
Information. From an AMC perspective the following information needs to be available for
WSM:
o Weapon System Effectiveness
o Costs
o Performance Killers
o Cost Drivers
o Change Proposals
o Actor Performance (products and services)
Weapon System Effectiveness. The F-35 information system is part of the Air System and
highly integrated with the AV. The Autonomic Logistic Information System (ALIS) supports
the mission planning, mission preparation, maintenance and supply chain management
processes. The basis is the AV Prognostic Health Management (PHM) and Off Board PHM
(OBPHM) system. The AVPHM system generates Health Reporting Codes (HRC) and
system health data. This data feeds to the OBPHM system to determine weapon system
status and health. Data from the CMMS and the PHM system is used to measure, monitor
and improve reliability and maintainability (R&M) of F-35 systems, sub-systems and LRC’s.
The basis is the data ALIS provides to the Sustainment Performance Management System
(SPMS). SPMS uses this data to determine the performance metrics in different tiers (to a
sub-system level). The focus is on PBL metrics as agreed to in the PBA. The following
performance metrics are defined in the F-35 program so far:
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- Readiness and Availability
� Air Vehicle Availability (AVA)
� Mission Capable (MC)
� Full Mission Capable (FMC)
- Mission Effectiveness (ME)
- Sorties Flown
� Percentage Sorties Flown (PSF)
� Percentage Flight Hours Flown (PFHF)
- Logistic Level of Effort
� Cannibalization Per Thousand Flight Hours (CANSPTFH)
� Maintenance Man Hours per Flight Hour (MMH/FH) aggregate
� Maintenance Man Hours per Flight Hour (MMH/FH) subsystems
For the F-35 propulsion system additional metrics are defined:
- Readiness/Availability
� Engine Not Mission Capable (E-NMC)
� Time on Wing (TOW)
- Mission Effectiveness
� Engine Mission Abort Rate (EMAR)
These performance metrics comply with the basic information requirements as defined within
AMC with regards to system effectiveness. System effectiveness information is provided on
different levels (installation, system, subsystem level) providing sufficient information to
assess system effectiveness in relation to the PBA. However, the performance metrics focus
on the performance of the PSI’s in relation to the PBA. These metrics do not provide integral
insight in weapon system performance and cost-effectiveness. With regards to performance,
certain maintenance activities (depot level maintenance, government induced
cannibalizations) are excluded from the metrics as is the first-last mile transport in the supply
chain. Metrics need to be clearly defined and agreed upon to assign responsibility clearly and
transparently. Overall performance for the AV needs to be defined including the performance
outside the boundary of the PSI.
Costs. The basis for the cost structure in the F-35 program is the cost per flight (PBL). Within
the program a model is in development which provides insight in the costs per flight hour
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($/FH). Table 5.1 provides the present cost structure. Defining sustainment costs in this
phase of the program is difficult. The F-35 program is in three life cycle phases: design,
production and sustainment (includes follow-on development). The design phase of the F-35
Air System is not expected to be finished before 2017. This also applies to the sustainment
concept. The sustainment concept will gradually change from a traditional approach to a full
PBA concept [PBL Transition Plan, 2010]. A full PBL support concept should be in place
around 2017. As the information in the table shows the way costs are assigned to a specific
fleet of aircraft is in development. Costs incurred by the operator regarding sustaining the F-
35 and the NL DMO for system management activities must be incorporated in the cost
structure to manage LCC. Furthermore, the main parts of costs are laid down in the cost per
flight hour. In the present cost structure these costs cannot be assigned to a specific
system/installation.
Table 5.1 Cost Structure F-35 Program
Program Element Partner Environment
Shared Mature Basis
Propulsion and Aircraft AV Lot Cost Partner Specific
Spares Common Yes TBD
Variant Specific Yes TBD
Sustainment Integration Yes Composite Share
Ration (CSR)
Training Equipment No Partner Specific
Support Equipment Non-pooled No Partner Specific
Pooled Yes TBD
ALIS Hardware No Partner Specific
ALS Manpower Yes TBD
DMS TBD TBD
Depot Stand-up Yes CONUS – US
OCONUS - Partners
Programming Lab Yes Equal Shares
Follow-On Development Design Yes CSR
Implement No Partner Specific
PBL TBD TBD
Performance Killers. In the F-35 sustainment concept performance killers are actively
identified. The basic maintenance concept of the F-35 is on-condition maintenance
[Maintenance Concept, 2008]. This is supported by an AVPHM and OBPHM system. Data
from the CMMS and the PHM system is used measure, monitor and improve reliability and
maintainability (R&M) of F-35 systems, sub-systems and LRC’s. The F-35 R&M program is
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defined in the Sustainment Management Strategy [JSFPO, 2010] and R&M Program Plan
[LMAero, 2006]. Force Life Management (FLM) programs for sustaining the AV and
propulsion system are being developed [LMAero, 2006].
Cost Drivers. The identification of cost drivers in the F-35 concept is not defined yet.
Basically identifying cost drivers and reducing sustainment costs is the responsibility of the
PSI’s in the PBL construct (incentive on $/FH target costs). As mentioned previously the LCC
perspective of WSM needs to assured in the PBL concept. At this time 3 yearlong PBL
contracts are foreseen in the F-35 program. Decisions with regards to weapon system
sustainment costs must be taken based on a total (30 yr.) life cycle perspective. To assure
that decision-making takes into account the total life cycle of the F-35, business rules must
be identified with the prime contractors (LMAero and P&W) on assigning costs, the
identification of cost drivers, the subsequent decision-making process and the effect on the
PBA.
Change Proposals. A change management program is defined [JSFPO Configuration
Management Plan, 2010]. Within the F-35 program change management concept,
Engineering Change Proposals (ECP) and Change Requests are identified. ECP’s and
change proposals are approved in the Joint Configuration Control Board (JCCB). Both are
boards are chaired by the JSFPO. The program partners have voting rights in both. The
impact of a change on the LCC of the F-35 is partly integrated in the change proposal
process. Propulsion related change proposals identify LCC and propulsion system
performance impacts. LCC and impact on performance information is limited in AV change
proposals. JSFPO plans do not require system performance and costs impact as a basic part
of the change proposal package at this time.
Actors Performance. In the previous paragraphs the different actors in the program are
defined. The PSI is measured and monitored inherently in the defined performance metrics.
If the PSI performance in the area of supply management is inadequate this will be reflected
in the PBA metrics. Other measures for actor performance are not defined at this time. The
support organization (ALGS and LST) is a combined government/industry organization. This
could lead to discussions on weapon system performance accountability. Clearly measuring
and monitoring performance of this organization and a clear structuring of responsibility are
required to manage this organization and the effect it has on weapon system performance.
The prime source for information is ALIS. Performance information is provided by SPMS.
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Communication. Information concerning the NL weapon system is communicated through
Weapon System Portals. Within the NL DMO standard WSM portals are defined. The content
of a Weapon System Portal is mandatory [NL DMO, 2010]. Figure 5.3 shows the standard
portal set-up.
Figure 5.3 NL DMO Weapon System Portals
The pre-described portal content includes:
o System Plan
o Roadmap
o Materiel Readiness
o Sustainment Costs
o Operational Plan
o Defence Staff
o Transfer Protocols
Based on this research the following information is included to the Portal:
o F-35 AV LCM model
o PK/CD information
o Airworthiness (Continuing Airworthiness information)
o Configuration Management
o Processes and Procedures
o Contract Information (SDD MOU, PSFD MOU, LRIP contract)
o Consultation Forums (Sustainment Performance Reviews etc.)
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Performance in relation to the PBA is available through the SPMS. It is foreseen that the
F-35 Weapon System Portal can link directly to ALIS and SPMS.
Design Results:
� There is sufficient information (ALIS and SPMS) to determine weapon system
effectiveness and to determine performance killers.
� The F-35 information system and program does not support the identification of cost
drivers. At this time the sustainment cost structure is immature.
� Change proposals are developed to improve system effectiveness and reduce LCC.
The supporting information regarding improving LCC are not always available
� Actor Performance is implicitly measured in the PBL performance metrics. More actor
performance metrics could be developed by measuring service levels (e.g. AR
throughput and turnaround time).
� SharePoint should be used to communicate information to stakeholders.
� SPMS is available to assess performance to the PBA agreed performance levels.
� The F-35 information system does not provide an integral overview of F-35 AV
performance.
5.2.2 Get Oriented
In this phase a qualitative analyses is made to establish the logistic baseline and
organization to manage the F-35 in the operational life cycle phase. The basis for the
analysis is the LPC.
Operational need. The AGCDS defines the operational need. Through the NL MOD Planning
and Budgeting process (MOD BPB Process, 2010) the operational need is translated in
operational requirements and the subsequent required budget. The F-35 Roadmap contains
the F-35 baseline and actual operational requirements. The Roadmap consists of
Operational Activity Calendar (OAK) and the Weapon System Business Plan (BP F-35). The
OAK contains the AGCDS activities related to the F-35 weapon system, Planned Flying
(JOP), Special Events (activities not specifically defined in the OAK or AGCDS) and holiday
planning. The BP-F-35 contains the specific requirements for materiel (flight hours, SGR,
Performance requirements and OTI), personnel (Aircrew and Maintenance) and finance
(budget). It must be noted that the performance requirements defined in the Roadmap are
not equivalent to the performance requirements in the PBA. The performance requirements
in the roadmap are translated by the NL PSM in PBA performance requirements and
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performance metrics for the non-PBL related actors like operational readiness, supply,
maintenance (O and O+), weapons and munitions.
Pre-conditions and limitations are established in the PBA related to the number and
qualifications of maintenance personnel, the user profile of the F-35 (flight envelope, mission
profiles) and logistic limitations (return times). These requirements are incorporated in the
Roadmap and managed by the NL WSM team.
System functionality and Installation Performance. The system functionality fulfills the
operational need. Stavenuiter (2002) defined an LPC short list for the operational life cycle
phase (Achieve cost-effectiveness). Based on the attributes identified in this short list the F-
35 system functionality is evaluated. System functionality is described by the system
definition data and system characteristics data. For an air-based weapon system
airworthiness certification is a legal requirement and has a significant influence on the
design. Airworthiness certification requirements are therefore added to the system
characteristics data. The results of the System/Installation Definition and Characteristics data
analysis are given in Annex F. Sufficient information is available to establish the baseline
system functionality and installation performance.
Logistic Products and Services, Activities and Actors. In the F-35 product support concept
(PBL) the PSI is responsible for logistic products, activities and services. Several support
processes remain the responsibility of the operator (RNLAF). The following products and
services are identified:
� aircraft readiness preparation (aircraft preparation, munitions, ordnance, fuel)
� operational maintenance (O and O+ level)
� supply processes (on-base, last-first mile)
� Armament preparation and maintenance
� Non-peculiar SE sustainment
Resources. In the F-35 product support concept the PSI is responsible for resources with the
exception of the logistic products and services the operator provides (operational readiness,
maintenance and supply). Personnel to support these processes are provided by the RNLAF.
Resourcing these logistic services, directly impacts weapon system performance. To assure
proper resources that need to be provided by the operator the PSI (LMAero and P&W) has
added requirements in the PBA. The NL WSM organization is responsible to monitor and
assess and control RNLAF performance to these requirements.
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Budget. In paragraph 5.3.1.4 the cost structure for sustaining the F-35 was presented. This
cost structure is still in development. In the program a transition phase is defined from a
traditional cost structure, based on products and services, to a PBL cost structure. This cost
structure depends on the PBL concept that is agreed upon in relation to the product support
risks that are (or will be) transferred to the PSI’s. This should be a balanced approach
meaning that with a transfer of risk to the PSI also the corresponding responsibilities should
be transferred to the PSI.
At this time the cost structure is a hybrid between PBL and a traditional approach. Costs are
calculated based on the $/FH, on CSR basis and for specific services (based on man-hours).
Within the NL MOD sustainment costs are part of the DEP budget. The DIP contains the
budget for new requirements (e.g. capability upgrades). Personnel costs are in the Personnel
budget. For a NL WSM to be effective the WSM organization should be able to control all
three budgets with respect to sustaining the F-35.
Design Results:
� The operational need (AGCDS) and operational requirements (Roadmap) can be
defined.
� System and installation definition data is available and sufficient to establish baseline
performance.
� PSI Logistic products and services are implicitly defined in PBL performance metrics.
� Operator logistic products and services are known and can be defined.
� Resources are primarily provided by the PSI. Operation support is provided by the
operator.
� Budget is based on the in the PBA agreed performance levels and subsequent costs
per flight hour. Because the program is in a transition phase to a ‘full’ PBL product
support concept, insufficient information is available to define baseline costs (LCC) at
this time.
5.2.3 Get Practiced
The objective of this phase is to provide a training program for the actors in the NL WSM
organization. As a result of the WSM pilot projects (phase 1 and 3) an education program is
established for actors in the WSM field [WSM pilot, 2009]. This education program should be
adapted based on the following:
PBL/PBA Knowledge. The level of PBL as introduced with the F-35 is one of the most
advanced forms of PBL: contracting weapon system performance. All actors within the NL
WSM team should have specific training in PBL/PBA concepts. The WSM Introduction
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course should include PBL/PBA concepts. At this time PBL/PBA is part of the Sourcing
element in this training course and is limited in scope. Specific training in PBL/PBA concepts
should be provided to F-35 system actors in the NL WSM team. As the introduction of the F-
35 is not expected for at least 8 years it is recommended to start with PBL concepts on a sub
system level on other air-based weapon systems to gain PBL experience
Management Control. The focus in a PBL product support concept, from a government
perspective, is increased management control. The training course should provide insight in
the requirements to achieve effective management control in a PBL environment. This
should include PBL management concepts including the responsibility and authority of the
various actors (PSI, PSM).
Weapon System and Weapon System utilization. Knowledge of the weapon system
(technical) and its utilization (operational) is essential to act as a smart buyer/smart
maintainer [GFR Smart Buyer/smart maintainer report, 2007].
Weapon system utilization knowledge is typically available in the operator field. Knowledge in
the utilization of the aircraft is required for managing weapon system requirements and
capabilities. Weapon system utilization directly links to performance metrics agreed to in the
PBA. Therefore this knowledge is not only required on an operator level but also at WSM
level. By working in a cross-functional team (like the proposed WSM organization structure)
this knowledge is shared in the WSM team.
Knowledge on a weapon system technical level is required in WSM and specifically for the
Military Type Certificate Holder. The F-35 program should develop a training program on an
academic level to provide the F-35 WSD with sufficient weapon system technical knowledge.
To maintain skill in the technical system certain NL personnel must be positioned within the
F-35 program (JSFPO and ALGSo) in this field as a Cooperative Partner Position (CPP) as
agreed upon in the PSFD MOU.
Logistic Support Engineering. WSM requires Logistic Support Engineering on an academic
level (identified as a key knowledge area in the WSM pilot). This knowledge is also required
in the smart buyer/smart maintainer perspective [GFR Smart Buyer/smart maintainer report,
2007]. Within the F-35 program a specific F-35 training program in logistic support
engineering should be developed. To maintain skill in logistic engineering NL personnel must
be positioned in the F-35 program (JSFPO and ALGSo) in this field as a CPP as agreed
upon in the PSFD MOU.
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Knowledge Sustainment in a PBL environment. Maintaining knowledge in a PBL product
support concept is a challenge because product support functions are outsourced to the PSI
as is the case for the F-35. This could result in less effective management control from a
government perspective. Skilled WSM team actors are a requirement in cost-effective
management of a weapon system. To mitigate this possible gap in knowledge the following
can be considered (further research is required):
- CPP positions: identify CPP position critical to sustaining the F-35. The above mentioned
elements are the basis.
- PBL management positions: identify key position in managing the F-35 and position NL
liaison positions. Key positions are the PSM, operations, LST, airworthiness, Fleet
Management, financial and contracts.
- Research Institutes: involve research institutes like NLR and TNO in key niche
knowledge areas (weapon system capabilities, PBL, Force Life Management)
- Depot level Maintenance: technical knowledge of the weapon system is gained when
performing depot level maintenance [USAF, 2005]. Consider this when the strategic
position on the NL sustainment ambitions is determined.
- SharePoint: use SharePoint as a knowledge management portal for the F-35 (SharePoint
as a central point for F-35 information and knowledge).
- Concentration of knowledge: by concentrating the NL WSM organization to one location
the core competence of the WSM organization is increased (cross-functional teams).
Design Results:
� Adapt existing education programs to include PBL/PBA knowledge, Management
control, weapon system and weapon system utilization knowledge and logistic
support engineering knowledge.
� More research is required to maintain knowledge levels in a PBL environment.
Courses of action are proposed to maintain competence levels.
5.2.4 Get Real
This phase provides a qualitative Logistic Program based on the analysis in the get oriented
step. The F-35 Roadmap is key to define the logistic program as discussed in the analysis
phase. The Roadmap provides the operator requirement for F-35 weapon system
performance. The NL WSM organization translates these operational requirements in
performance requirements for JSFPO and to performance requirements within the NL MOD
organization with regard to operational support functions as described previously.
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The weapon system performance requirements and the operational planning are provided to
the JSFPO in the LRIP contracting process as provided in annex E. The NL WSM
organization defines a Partner Procurement Request (PPR). Based on these requirements
the JSFPO consolidates all the program participant’s requirements in a Consolidated
Procurement Request (CPR) to contract weapon system performance with the PSI’s. The
partner requirements are laid down in a bilateral PBA. In addition the JSFPO has
requirements regarding NL MOD support. Based on the PSI requirements to support weapon
system performance, requirements are set to the operator regarding the execution of O and
O+ level maintenance, the quantity and quality of maintenance personnel and supply
activities. These performance indicators need to be clearly defined in the Roadmap and be
monitored, assessed and controlled by the NL F-35 WSM organization.
Asset requirements are defined in the F-35 Roadmap. To define the Logistic Program AMC
starts with defining the status category and year periods. Based on this the Active Time, and
Mission Time is defined. The status category for the F-35 is Operations (sustainment phase).
Defining the year periods should be coupled to the PBA Period of Performance (PoP) (one
year contract with a 2 year outlook). In this way PBA performance and weapon system
performance are coupled. The F-35 weapon system has an on-condition based maintenance
concept. Large scale preventive maintenance is not required. The Active Time is therefore
defined as 365 days per year. The mission time is the average sortie time.
The basis for defining air-based weapon system performance is the required number of flight
hours, weapon system availability and capability. Flight Hours are based on the required
hours for pilot training (JOP) and planned combat operations. The Roadmap will define these
requirements. Mission capability is defined in the PBA in deployed and non-deployed
situations. Availability is defined on a 24/7 hr. basis matching the active time.
Maintainability and reliability per system or installations level can be based on baseline
performance requirements set within the F-35 program. These baseline requirements also
form the basis for the SPMS model.
Budget is based on the cost structure as discussed in de previous paragraph. The cost
structure and assigning costs to partners is not determined yet.
Design Results:
� It is expected that the required information to determine a Logistic Program is
available at the end of SDD.
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� The cost structure is too immature at this time to provide input to the Logistic
Program.
� At this time not all information is available because of the status of the program (end
SDD phase expected in 2017).
5.2.5 Get Across
To effectively manage the F-35 weapon system an LCM model is required. At this time no
LCM model of the F-35 system is foreseen within the program (not for the F-35 global fleet
as for the NL F-35 fleet). A model to measure and monitor system effectiveness is being
developed. This model provides the performance metrics to the SPMS. This model has its
limitations. It is purely constructed to support the management of the PBA. It does not
provide an integrated overview of weapon system performance. Secondly it does not include
insight in LCC.
An LCM model of the F-35 Air Vehicle can be constructed according to the following steps:
� Defining the system entities and attributes
� Function Diagrams
� Installation Diagrams
� Activity Diagrams
System entities and attributes. The LCM model must be able to adapt the key system
attributes for air-based weapon systems: flight hours, Sortie Generation Rate. Baseline and
actual performance information is required on a system and installation level. This
information is available in ALIS and in SPMS.
Function Diagrams. Function diagrams can be based on the MEFL concept used for the F-
35. The MEFL is based on the F-35 functionality and is linked to the AV installations and
systems.
Installation diagrams. The installation diagrams can be constructed based on the present
structuring of the AV based on the MEFL and the Logistics Control Number (LCN).
Activity diagrams. Activity diagrams in a PBL product support concept are highly simplified
according to a traditional product support concept. Paragraph 5.3.1.2 described the basic
activity diagram. The activity diagrams must model the overall activities including the
activities of the F-35 management organization and the operator. Coupled to the activity
diagrams are costs. Because the main part of the cost structure consists of the $/FH
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component assigning these costs to activities on an installation level is not possible. This will
limit the possibility to determine cost drivers and overall LCC. A method needs to be
developed to provide insight in these costs to assure the LCC perspective as discussed in
the previous paragraphs. A possibility would be to use relative costs (based on the $/FH) but
this will require more research.
Design Results:
� LCM model must incorporate air-based weapon system attributes
� Incorporating cost information in the LCM model is not possible at this time
� More research is required to assign PBL costs to actors in the activity diagram (within
LCM model) in order to manage LCC and determine cost drivers.
5.2.6 Get Grip
To get grip on logistic process and by that on the cost-effectiveness of the F-35 weapon
system the pre-conditions to control need to be fulfilled. Because the F-35 weapon system
will not be introduced before 2019 the actual implementation of the design as described in
the previous paragraphs cannot be evaluated at this time. The effectiveness, suitability,
feasibility and support for this conceptual design are reflected with stakeholders. This
paragraph focuses on the issues, identified in the design, that need to be resolved in order to
get grip on weapon system cost-effectiveness. The basis is the pre-requisites as defined by
Stavenuiter (2002):
Fulfillment of the pre-conditions for control
Permanently appointed LCM team. The global F-35 LCM team consists of the JSFPO PSM,
the PSI’s and the F-35 Operators. Paragraph 5.4 will provide the proposed WSM
organization to support the F-35 global fleet and specifically the NL F-35 fleet.
Availability of relevant and reliable product data. The F-35 weapon system information
structure (ALIS) provides the required system effectiveness information. The provided
information concerning weapon system performance (SPMS) is focused on PSI performance
management (PBA metrics). It does not present insight in the performance of the integral F-
35 logistic support system. The F-35 sustainment cost structure is in development. Because
of the PBL construct costs are directly related to performance ($/FH) which makes budgeting
transparent. However it provides insufficient insight to identify cost drivers and to support
LCC decision-making.
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Presence of skilled and experienced actors. NL WSM actors need to be trained in PBL/PBA
concepts, weapon system, weapon system utilization and logistic engineering. Maintaining
these skills is the challenge in a PBL environment because the majority of the product
support functions are executed by the ALGS and JSFPO organization. Integrating NL WSM
actors in the global sustainment organization on key positions (liaison and CPP positions)
and the WSM organization structure supports the retaining the required knowledge and skills.
Maintaining skills in a PBL concept must be taking into account when determining future NL
F-35 sustainment ambitions.
Logistic program accepted by all actors. The Roadmap concept in use for air-based weapon
systems to define the logistic program and to communicate this with required actors supports
this pre-condition for control.
Operational LCM model. The LCM model is essential to achieve effective management
control. The LCM model must be adapted to the weapon system entities and attributes of an
air-based weapon system. Furthermore, the LCM model requires an interface with the F-35
information system structure (ALIS and SPMS) to provide cost and performance information.
Structuring costs in the LCM model within a PBL concept requires more research. At present
the LCM model in AMICO does not support air-based weapon system entities.
AMICO for all parties. The SharePoint information portals is use within the NL MOD as
weapon system portals provide the required access to F-35 weapon system information by
all actors.
What if analysis
On a program level a ‘what if’ analysis on the F-35 product support strategy is conducted
every 5 years. In this business case analysis (BCA) the product support strategy is
evaluated. The starting point is the Weapon System Planning Document (WSPD) [WSPD,
2011]. In a PBL concept the PSI is responsible for evaluating performance killers and cost
drivers to achieve the performance requirements as defined in the PBA. The focus of the PSI
is on the PBA contracting period (Period of Performance) while the focus of WSM is on the
total life cycle of the F-35. At this time the program has insufficient tools to support what if
analysis in support of directing and controlling weapon system cost-effectiveness. The LCM
model should facilitate ‘What If’ analysis. Programs should be established to incorporate
performance killer and cost driver analysis in the F-35 sustainment management structure.
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In the F-35 change proposal process LCC analysis are incorporated in the propulsion system
change proposals. The AV change proposals lack such an analysis. Further programs to
improve system effectiveness and reduce LCC need to be defined.
Organizing LCM meetings and bilateral communication
The NL MOD consultation structure must be adapted to weapon systems with a PBL support
concept. The NL WSM organization approach as proposed in the previous paragraph and
the PBL concept limits the requirement for an extensive consultation structure because all
relevant organization elements are an integral part of the WSM organization. The focus is the
interface with the JSFPO as the PSM, LMAero and P&W as the PSI and the operators within
the RNLAF (MOB’s). Sustainment Performance Reviews are the basis for reviewing F-35
weapon system performance between the customer and JSFPO/ALGSo. Bilateral
communication takes place on different levels: within the JSFPO and LST supported by the
NL liaison functions and within the NL WSM organization.
Design Results:
� A permanently assigned LCM team is structured in the program based on the US
DOD PBL concept. NL involvement in this LCM team needs to be assured.
� Constructing an LCM model that supports air-based weapon system requires more
research.
� An interface between the LCM model and the F-35 information system is required to
provide cost and performance information.
� The F-35 cost structure is too immature to provide relevant cost information in support
of controlling weapon system cost-effectiveness.
5.3 NL F-35 WSM organization
This step defines the NL WSM organization and the role of the WSD herein. Paragraph 5.4.1
discusses the pre-conditions for the design. In paragraph 5.4.2 the NL F-35 WSM concept
and process is discussed. The required organization functions in support of the NL WSM
concept for the F-35 are defined in paragraph 5.4.3. The required organization structure to
support F-35 WSM is defined in paragraph 5.4.4.
5.3.1 Design Pre-Conditions
The NL MOD WSM approach needs to be adapted to the F-35 sustainment management
approach taking into account the TOR’s. When (re)designing an organization the design
principles, as defined by De Leeuw (2002) must be taken into account (annex C).
Furthermore the upcoming restructuring of the NL MOD (Hillen, 2011) and the subsequent
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Blue Print MatLog (2011) define future objectives within the NL MOD organization with a
specific focus on materiel logistic processes. In addition there are general pre-condition like
the MAR requirements and the F-35 sustainment concept. From the above mentioned
subjects the following pre-conditions can be derived for the NL MOD WSM organization
design:
Terms of Reference
� Organization structure adapted to the high demand in horizontal coordination and
decentralized decision making (WSM environment and WSM process).
� Create integration functions to support coordination between the government and
PSI.
� One single actor with WSM responsibility and authority.
� Incorporate the PSI in the WSM consultation structure.
� Organize WSM to maintaining organization core competence.
Design Principles
� Consistency: (sub)organization design must be consistent with existing organization
structure [De Leeuw, 2002].
� Organization must be able to operate as an autonomous system [De Leeuw, 2002].
Balance of responsibility and authority.
Blue Print MatLog
� More control Operational Commander (OPCO) over weapon system sustainment
� ‘Je ben er van, dan ga je er over’ which is explained as responsibility and authority
matched to organizational functions.
General
� Military Aviation Requirements put requirements on organization’s responsibility and
authority.
� Design must interface effectively with F-35 Global Sustainment concept.
The design follows three basic steps as defined by De Leeuw (2002):
1) What has to happen? This step defines the NL WSM concept for the F-35 and the NL
WSM process (the primary process).
2) How can this be divided? Based on the primary process organizational functions are
defined.
3) How can the separated parts be connected? The organizational functions are
structured taking into account the previously defined pre-conditions.
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5.3.2 NL F-35 WSM concept and process
5.3.2.1 NL F-35 WSM concept
The upcoming reorganization of the NL MOD will bring changes to the NL WSM concept as
defined in the Blueprint MatLog [NL MOD, 2011]. The most important elements are covered
in the TOR’s: (1) more control operator over sustainment and (2) matching responsibility and
authority for transparent decision-making. For the AMC Portal Game in support of the WSM
master class development, Stavenuiter (2012) developed a WSM framework. Figure 5.4
provides the WSM framework adapted to the directives in the BluePrint MatLog [Stavenuiter,
2012].
Figure 5.4 WSM approach from a Blueprint MatLog perspective
This approach defined three teams in support of WSM: the OPCO team, WSM team and
Sustainment team. The focus of the OPCO team is overall weapon system performance. The
WSM team consists of the Asset Manager (AM), the Standards Framework Manager (NS)
and the Sustainment Manager (SM). The WSM team controls and directs weapon system
cost-effectiveness: the WSM production process. The WSM team is the tri-partite construct.
The Sustainment team manages the daily sustainment activities.
This approach needs to be adapted to the F-35 sustainment concept and the PBL approach.
In the F-35 sustainment concept the PEO has the program management role and the PSM is
responsible for managing weapon system cost-effectiveness. The PSI is responsible for
weapon system performance. See figure 5.5.
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Figure 5.5 F-35 Sustainment concept
Paragraph 5.3.1.3 defined the LCM team for the F-35 from a global perspective. In the F-35
sustainment concept the LCM team consists of the PSM, PSI and the Services. The PSM
and Services are the government element in the F-35 LCM team. NL WSM is exercised
through the F-35 sustainment concept as described above and needs to effectively interface
with this concept.
As defined in the TOR’s the WSM responsibility and authority must be assigned to one actor
to ensure effective management control. In the PBL concept this is the PSM. After the
restructuring of the NL MOD, two prime WSM actors remain: the OPCO and the NL DMO.
When taking into account the pre-conditions from the Blue Print MatLog, the presented
structure in figure 5.6 and the PBL concept NL WSM responsibility is assigned to the OPCO,
in case of air-based weapon systems to the RNLAF. It provides the RNLAF with more control
operator over sustainment, the RNLAF is the asset owner and has the central role in the NL
total aviation safety concept as the Operator (MAR-OPS). From a core competence
perspective the RNLAF has the weapon system utilization knowledge which is a pre-requisite
for effective WSM. By assigning WSM responsibility and authority to the RNLAF the
functionality of the operator in the sustainment domain and the subsequent responsibility and
authority are balanced. To separate roles (operations and sustainment) WSM responsibility
should be assigned to DML. Figure 5.6 provides a view of the NL WSM approach in a PBL
environment.
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Figure 5.6 Conceptual NL WSM approach in a PBL environment
Program Management: The Directorate of Operations (DO) is the AO. The NL DMO is
responsible for WSM policy and directives. The NL DMO provides the pre-conditions for
WSM (e.g. approach, methods, and guidelines). DML is responsible for WSM and has WSM
authority.
Weapon System Management. The WSM team consists of the DML as the Weapon System
Manager. The DML organization has an F-35 Sustainment Manager responsible for the PSM
role. Together with the MTCH, responsible for the Military Type Certificate (design authority),
these actors form the traditional WSM tri-partite structure.
Sustainment Management. The SM manages weapon system cost-effectiveness supported
by product management (PM) teams. The product management functions are defined in
paragraph 5.4.3.
5.3.2.2 NL F-35 WSM process
Directing and controlling NL F-35 weapon system cost-effectiveness is an NL responsibility
and the prime objective of WSM. In essence this responsibility is exercised through the
JSFPO. As discussed previously the JSFPO/DoS has the PSM role and is directing and
controlling weapon system cost-effectiveness for the global F-35 fleet. The WSM process is
derived from the AMC and WSM production process as described in this research. The NL F-
35 WSM production process is visualized in figure 5.7.
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Figure 5.7 NL F-35 WSM production process
5.3.3 NL F-35 WSM organizational functions
The following functions are required to support the WSM production process:
� Operations. The operational need (operational requirements and planning) is the
input for the WSM process and is defined by Directorate of Operations (Fighter
Operations) within the RNLAF. Furthermore in the NL Total Aviation Safety concept
the central role for safe and cost-effective operation is structured in the MAR’s for the
operator (RNLAF).
� Logistics. The operational requirements as defined by the operator are managed
through the Roadmap. Furthermore operational logistics is an essential function in
wartime operations. Within the F-35 concept operational logistics remains a NL MOD
responsibility. Operational logistics is executed by the RNLAF Directorate of Material
(DML).
� Engineering. The MAR-21 defines the requirements for the MTC and MTCH. The
MAR responsibility cannot be delegated to an entity outside the NL MOD. Within the
NL MOD the WSD departments act as MTCH for a specific weapon system. In
addition the MAR-OPS/Subpart M identifies a technical support function requirement
to support the operator.
� Contracts. The PBA defines the relationship between the actors in a PBL concept.
The scope and the financial volume of the PBA require effective contract
management. Furthermore on a program level the PSFD MOU is the vehicle
describing the relation between the US Government and the Partners governments in
the F-35 program. The MATLOG directorate within the NL DMO is the central entity
for contract management.
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� Financial Control. The high financial volume of F-35 sustainment and the contract
value of the PBA require rigorous financial control. HDFC is responsible for financial
control.
� Information management. Business management software is an integral part of the F-
35 support structure. NL DMO/Joint IV Command (JIVC) is responsible for Business
Management software.
5.3.4 WSM organization structure
The next step is structuring these organizational functions and entities to an effective WSM
organization: the permanently assigned LCM team from an NL perspective. As well the NL
WSM organization as the integration and relation with the JSFPO must be taken into
account. Horizontal coordination and decentralized decision-making must be assured in the
overall F-35 sustainment environment. The interfaces between the NL WSM organization
and the F-35 sustainment construct must be established. First the NL WSM organization
structural configuration.
NL WSM Organization Structural configuration. An organization structure that supports high
demands on horizontal coordination and decentralized decision-making is required (TOR).
Organization structures that support this requirement are horizontal organization structure
like a project, matrix organization, a structure based on the primary process and network
organizations [Mintzberg, 1993 and Daft, 2007]. As concluded in the analysis phase the NL
MOD organization structure has a vertical structural configuration. This is typical for large
(military) organizations. A hierarchical (vertical) organization structure is required to manage
large organizations [De Leeuw, 2002].
The matrix organization structure is seen as most suitable because:
� It supports the requirements in the TOR: Supports high demand on horizontal
coordination [De Leeuw, 2002].
� Fits to the existing organization [De Leeuw, 2002]. Can fit into an overall vertical
organization structure and maintain hierarchy in the NL MOD organization.
� And additionally it supports maintaining skill in PBL construct. Cross-functional teams
integrates and synthesizes knowledge across different areas of expertise and serves
as a bridge between the individual and the organization [Boonstra, 2006]
There is an inherent disadvantage with matrix organization structures. In a matrix
organization structure the balance between the functional line and the hierarchical line is
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sensitive. Participants need to understand the dual authority in this construct and will require
interpersonal skills and extensive training [Daft, 2007].
Integration with F-35 sustainment management organization
As discussed previously control over weapon system cost-effectiveness is exercised through
the F-35 sustainment organization. The high demand on horizontal coordination and
decentralized decision-making also applies to the relation between the NL WSM organization
and the F-35 sustainment management organization (JSFPO and ALGSo). This applies to all
the functional elements that are identified in the NL WSM organization. For the NL WSM
organization to support horizontal coordination and decentralized decision-making in this
environment integration functions (liaison functions) must be created. The F-35 sustainment
management concept is provided in figure 5.6. For the key functional elements integration
functions are defined.
The key functional elements are:
- Program Management. Supports involvement of NL in program management (program
objective, policy, strategy and planning). Assured by National Deputy (ND) and Assistant
National Deputy (Assistant ND). This responsibility is exercised through the JSFPO
based on the governance structure as defined in the Production Sustainment and Follow-
on Development (PSFD) Memorandum of Understanding (MOU). The involvement in the
F-35 governance structure is ensured by participating in the advisory groups, councils
and boards (Annex E).
- Weapon System Management. Assure involvement NL in F-35 WSM to secure weapon
system cost-effectiveness. Assured by NL PSM representative in DoS organization and
the NL Class Desk under the Director of Weapon System Program Management
(DWSPM).
- Product Management. Assure involvement in key product management functions:
o Airworthiness. Assure the NL can comply to MAR (Flight safety, airworthiness
certification, continuing airworthiness) and manage the NL F-35 MTC. Assured by
NL Class Desk, NL Delegated Airworthiness Agent (NL DAA) and NL LST
representative.
o Contracting. JSFPO is contracting sustainment on behalf of partners. Assure
involvement of NL in contracting process to ensure NL interest.
o Fleet Management. Assure NL involvement in fleet management with regards to
MAR-OPS responsibility role operation, supply chain management (last-mile).
Assured by NL Class Desk and NL LST Fleet Management.
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o Operations. Ensure involvement in defining weapon system capability
requirements, operational planning, OTI’s). Assured by NL Assistant ND and
position CPP in Air System Requirements (ASR) IPT.
o Information Management. Ensure involvement in ALIS sustainment and
development to integrate ALIS business management software functionality in NL
MOD information management structure. Position CPP in ALIS IPT.
o Financial Control. Assure NL interest because of financial dimensions of the
program, F-35 sustainment costs and sustainment costs of NL F-35 fleet.
Proposed NL WSM organization. The starting point of the WSM organization is the WSM
approach in figure 5.7. DML has prime responsibility and authority over WSM in a PBL
construct. DML also contains the NL F-35 PSM functionality. To make WSM effective the
functional elements defined in the previous section are integrated in the matrix organization
structure. This leads to the organization structure as proposed in figure 5.8.
Figure 5.8 NL WSM matrix organization including integration functions in F-35
sustainment organization
The function and responsibilities of the WSM organizational elements are as follows:
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Weapon System Management (RNLAF/DML) - WSM function and Logistics function
- Directing and controlling system cost-effectiveness (PSM role)
- Operational Logistics/Logistic Support Engineering
- Defining operational requirements (concept PBA)
- Managing F-35 Roadmap
- Manage relationship with JSFPO, the PSI’s and the partners in the program
Operations (DO/Fighter Operations) – Operational function
- Defining operational need (AGCDS, business plan)
- Operational planning
- Organization level maintenance (MAR-145)
- MAOC holder (MAR-OPS)
Military Type Certificate Holder (NL DMO/MATLOG) – Engineering function
- Manage F-35 Military Type Certificate (MAR-21)
- System Support engineering function (technical system knowledge)
- Technical support function (MAR-OPS/Subpart M)
Financial control (HDFC/DF&C) – Financial Control function
- Budget and cost control
Contracting (NL DMO/MATLOG) – Contracting function
- PBA contracting
- MOU management (SDD, PSFD)
- Contract management (LRIP/FRP including F-35 sustainment)
Information Management (NL DMO/JIVC) – Information Management function
- functionality ALIS
- ALIS and SPMS integration in information management structure NL MOD
Design Results:
� WSM takes place in an international environment
� The WSM organization consists of the functions operations, logistics, engineering,
contracting, financial control and information management.
� The matrix organization structural configuration is seen as most effective for
managing NL F-35 weapon system cost-effectiveness.
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� WSM responsibility and authority is assigned to the OPCO (RNLAF).
� Liaison functions (integration in F-35 global sustainment organization) are established
to support coordination between the NF-35 WSM organization and the F-35 Global
sustainment organizations. Functions are dedicated for NL WSM.
� Specifically to support WSM a liaison position should be created in the DoS
organization (JSFPO/PSM)
5.4 Organizing the F-35 WSD
Paragraph 5.4 defined the role of the WSD in the NL F-35 WSM concept. The WSD provides
the MTCH function and the weapon system technical knowledge within the NL F-35 WSM
construct. To organize the WSD a similar approach is taken as for the WSM organization.
First the requirements for the WSD organization are set. Then the WSD process is defined
followed by the WSD organization structure.
WSD Requirements. This research focuses on the sustainment life cycle phase. An F-35
MTC is issued by the NL MAA. The objective of the F-35 WSD in the sustainment phase is to
maintain the F-35A CTOL MTC and Military Supplemental Type Certificates (MSTC).
MSTC’s are used for additional mission equipment not included in the basic MTC (i.e. new
weapons). The basic process is to sustain the certification basis of the aircraft. The MTC
products and services are described in the MAR-21 and the MTCHOE [MTCHOE, 2010].
The MAR-21 provides the basis for the MAR-21 organizations. Oversight is executed by the
NL Military Aviation Authority (MAA). The regulations stipulate that only an NL MOD
organization entity can be approved as an MAR-21 organization. At present time the MAR-21
organization is structured in the NL DMO Weapon System Directorate. The Air Systems
Branch is the MAR-21 organization. The Deputy Director Weapon Systems is the MAR-21
Accountable Manager and Military Type Certificate Holder. Within the ASB weapon system
departments are the mandated Military Type Certificate Holder. The ASB has a Fighter and
Training Aircraft Division responsible for the F-16 fighter and PC-7 training aircraft. As the F-
35 is potentially replacing the F-16 the F-35 will integrate in Fighter and Training Aircraft
department within the ASB.
WSD Process. The MTCHO is responsible for maintaining the F-35 MTC in the sustainment
phase. The MTCH organization generates approved data that the operator (MAR-OPS) and
maintenance organization (MAR-145) can use to operate and maintain the aircraft. Approved
data is design data from a design organization that is approved by the NL MAA and within
the scope of that organization [MTCHOE, 2009]. Design data consists of the design data for
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the initial MTC, MSTC’s, aircraft modification, repairs, aircraft documentation (flight manual,
maintenance manuals) and airworthiness directives. Furthermore the MTCHO is responsible
for reporting occurrences to the NL MAA as a result of discrepancies to the type design. The
MAA and the MAA approved MTCHO organization are the only organizations that can
produce approved data. Figure 5.8 shows the basic process. When the MTCHO is approved,
privileges are granted by the NL MAA for approving changes to the type design. Table 5.2
provides an overview of the MTCHO privileges [MAR-21, 2009].
Table 5.2 MTCHO privileges
According to the MAR-21 there are two ways to produce approved data: certification by
verification and certification by validation. In the certification by verification process the
certification basis is defined by the MTCHO and a certification process is conducted to show
compliance with the applicable airworthiness requirements. In the verification by validation
process certification data approved by an NL MAA recognized aviation authority is used in
the certification process. In the validation process acceptable data (data approved by an NL
MAA recognized authority) is validated by the MTCHO. Figure 5.9 shows the basic process.
The validation process determines if design data comes from a recognized authority, is
applicable to the NL configuration and has no possible effect on an NL specific configuration.
The use of acceptable data (from an approved authority) is more effective and therefore the
preferred option. The MAA Recognition and accreditation position paper provides the policy
for recognizing aviation authorities [MAA-NL-PP, 2011]
Classification Approve Direct
verificationvalidationcombination
Airworthiness Directives not issued by NL MAARemarks:green = privilegeorange = no privilege, MAA approval required yellow = not applicable
minorChanges
Repairs
major
minormajorwithin MTC limitsall other changes
Documentation
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Syste
m
Info
rmation
Port
al
Syste
m
Pla
n
MT
CH
OE
WS
D P
rocedure
s
Appro
ved F
ore
ign
Airw
ort
hin
ess A
uhority
MA
R-2
1
F-3
5 W
MS
(AR
pro
cess)
ALIS
Figure 5.9 Basic WSD process
In the introduction of this chapter the JSFPO was assigned with program responsibility.
JSFPO does not have any airworthiness authority over production aircraft. Technical
Airworthiness Authority (TAA) for Military aircraft is by US law (Title 10) assigned to the
USAF (Air Force), NAVIAR (Navy) or the AED (Army). In this respect the USAF and
specifically the Aeronautical System Command/ Engineering (ASC/EN) has TAA for the F-
35A CTOL aircraft. In this construct the JSFPO with its two prime contractors (LMAero and
P&W) is seen as the design organization and is responsible for compliance showing and
ASC/EN is responsible for the compliance finding. ASC/EN conducts an independent check
on the design and certification data the JSFPO is providing within its program
responsibilities.
To use this construct effectively ASC/EN needs to be approved by the NL MAA as a
technical airworthiness authority. Within the USAF construct the F-35 Life Cycle Support
Office (LCSO) is the USAF MTCH and is structured under ASC within the Fighter and
Bomber directorate. The LCSO is responsible for managing the USAF F-35 type certificate.
For the NL to use all required data (e.g. also individual aircraft repairs or specific NL
configuration items) also the NL configuration needs to be managed by ASC/EN in
combination with the LCSO. As the JSFPO has the program management role JSFPO will
develop a Memorandum of Agreement (MoA) in which the ASC support for a partners
specific configuration is arranged. Figure 5.10 show the airworthiness constellation construct.
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Figure 5.10 F-35A CTOL Airworthiness Constellation
WSD Organization Structure. The F-35 WSD structure must be consistent with the structure
of the MTCH organization as described in the beginning of the paragraph. The prime function
is to manage the F-35A NL MTC. The MAR-21 prescribes basic functions. The organization
needs to contain an Accountable Manager and MTC holder. The current ASB has chosen to
concept of a combined AM and MTCH and mandated MTC holders for the various weapon
systems or combination of weapon systems. This is accepted by the NL MAA. Furthermore a
Post Holder Engineering (PHE) function is required. The PHE is responsible for all required
engineering activities. The activities to maintain the MTC are highly technical and require
specific skill in that specific technical function. A functional organization structure is expected
to be most effective. The technical functions that are also applied in the maintenance
organization to specify maintenance functions can be used: airframe, propulsion, avionics,
weapons and flight safety equipment. Because propulsion has a special position in the
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program (is separately contracted and supported) propulsion is a specific functional element
in the WSD.
Interface F-35 Sustainment Organization. Managing technical products is a functionality of
the Weapon System Program Manager Directorate (D-WSPM) and is supported by the
Lightning Support Team. The D-WSPM has a Class Desk function for each variant
responsible for the technical configuration of the respective variant. The Class Desk is
responsible for technical products and the related airworthiness certification requirements.
The Class Desk is also responsible for the logistic support in relation to the technical
products. For this element the Class Desks interfaces with the DoS as the PSM.
The LST is the entry point for technical issues from the F-35 fleet. The starting point is the
Action Requests generated within the Customer Relation Management (CRM) tool in ALIS
(AR’s). Documentation changes, repairs and inspections are developed and released under
the responsibility of the LST. Before these technical products can be released they need to
be approved by the MTCHO. The LST contains partner positions in support of managing the
partner fleet. The LST function is seen as a part of the WSD.
As mentioned in figure 5.9 the JSFPO together with the PSI’s (LMAero and P&W) is
considered as the design organization. To oversee airworthiness activities and ensure the
quality of the delivered products the engineering directorate contains participant Delegated
Airworthiness Agent (DAA) for each participant. In the sustainment phase changes to the
type certificate (major modifications) and the subsequent airworthiness certification process
is managed by the JSFPO. Airworthiness management within the JSFPO takes place in the
Engineering directorate where also the DAA’s are located. The DAA (with partner DAA’s) is
involved in this process. The NL DAA function is therefore seen as an integral part of the
WSD.
To support a fleet of aircraft it is common practice from an OEM perspective to provide Field
Support Engineers (FSE) to a user. The FSE provides technical support and a direct
interface with design and sustainment engineers in the OEM organization. At this time the
JSF program intents to assign FSE’s to each user. Because providing technical support is
the key function of the FSE, the FSE can be included in the F-35 MTCH organization (blue
block in figure 5.11).
Figure 5.11 shows the proposed WSD organization structure.
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Figure 5.11 The F-35 WSD organization structure
WSD Responsibility and Authority. The WSD requires sufficient authority to effectively
perform the assigned roles. Also the responsibility for these functions must match the
authority provided to the WSD. The basis is the privileges granted by the NL MAA to the
WSD as the F-35 MTCHO. Table 5.6 provides these privileges. The responsibility and
authority of the WSD are in line with this construct.
Furthermore the WSD is responsible for providing technical support/advice to the weapon
system manager and/or PSM. Authority is assigned to the PSM with the exception of the
authority connected to the MTCHO function. This authority resides with the WSD as the
MTCHO.
Design Results:
� F-35 WSD is responsible for sustaining the NL F-35 MTC and providing weapon
system engineering knowledge in the NL WSM organization
� Use of foreign approved aviation or airworthiness authority ensures that the
‘certification by validation’ method can be applied
� The PHE is responsible for all MAR-21 related engineering activities
� A functionally organizational configuration supports the WSD prime roles.
� Integrated in WSM matrix organization.
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5.5 Stakeholder Design Assessment
An initial assessment of the proposed WSM and WSD design is carried out. The purpose of
this assessment is three folded [De Leeuw, 2002]. The main purpose is to capture the
perspective of stakeholders of the WSM and WSD conceptual design. Secondly it is
important to involve stakeholders in the design process. Participation is one of the design
principles of De Leeuw (2002). Finally the involvement and perspective of stakeholders
prevents a possible biased view of the researcher.
5.5.1 Approach
As mentioned, the objective of the assessment is to capture the perspective of stakeholders
on the conceptual WSM and WSD design and to which extend the design is capable of
controlling weapon system cost-effectiveness. The stakeholder assessment is intended as a
first preliminary assessment of the design. Further refinement of the design requires more in-
depth participation of specific stakeholders and is proposed as further research.
The basic approach is gathering the perspective of stakeholders based on a Strength,
Weakness, Opportunity and Threat (SWOT) analysis of the design. By using the SWOT
analysis, stakeholder information is structured and can be analyzed. The design is presented
to the stakeholder in a briefing by the researcher. This provides to opportunity to discuss and
clarify the design. After this briefing, the SWOT analysis is conducted. Annex G contains the
structure of the assessment, the selected stakeholders and the results of the assessment.
5.5.2 Results
This paragraph summarizes the results of the SWOT analyses. Paragraph 5.5.2.1 contains
the results of the conceptual WSM design. The results of the WSD design are summarized in
paragraph 5.5.2.2.
5.5.2.1 WSM design SWOT analysis
Table 5.3 summarizes the view of stakeholders captured in the SWOT analysis of the
conceptual WSM design.
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Table 5.3 WSM Design Stakeholder Assessment Results
Strengths
� WSM matrix organization structure
� NL Integration functions within JSFPO
� Structuring of WSM responsibility and authority
� Concept to control weapon system cost-effectiveness in a PBL environment
Weaknesses
� Separation of responsibilities between asset owner and user
� Clarity on WSM organization structure versus WSM tiered approach
� Matrix organization top structure is identical to structure of organization substructures (departments)
� Clarity on relation between NL WSM organization and external organizations
� Management of operator logistic activities
� Influence the WSM organization has on human resources policy and budget
� Coordination with F-35 sustainment organization due to time difference
� Flexibility of the design to adapt to customer/supplier relation in the PBL environment
� The proposed WSM design is unique solution for the F-35
� Release ability of required WSM information (USG National Disclosure Policy)
Opportunities
� The matrix organization WSM structure provides flexibility and efficient use of (rare) core competence
� Human resource management with WSM team approach
� Spin-off of the design on future restructuring of NL MOD WSM organization and business operations
� Improved insight in WSM control elements
Threats
� Facilitation of continuous improvement in the proposed WSM design
� Lack of a planning function (short, medium and long term) in the proposed design
� Upcoming restructuring of the NL MOD and the direction to outsource WSM related activities
� Stability of F-35 sustainment concept
� WSM responsibility and authority assigned to OPCO for the NL DMO
� Remaining a smart customer in a PBL product support concept
� Dual line of responsibility in a matrix organization structure
In general it can be concluded that stakeholders support the proposed WSM matrix
organization structure, the use of liaison functions to support coordination between the NL
WSM organization and the F-35 sustainment organization. The analysis also shows support
of the LCM systems approach to control weapon system cost-effectiveness in a PBL
environment. Stakeholders indicate that the program management layer in the WSM
approach is not defined in an adequate manner and that the design lacks a planning
function. The relation (responsibility and authority) between the NL WSM organization and
the external PSM organization is not clearly defined in the view of a limited number of
stakeholders. Stakeholders indicate that the proposed way to control weapon system cost-
effectiveness can provide the insight WSM requires and that the proposed design can
support future restructuring of the WSM construct. The possible lack of support of NL DMO
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with regards to structuring WSM responsibility and authority (OPCO) is seen as the major
threat for the proposed WSM design. Several stakeholders indicate that primarily the
structuring of WSM responsibility and authority and the relation with external organizations
(PSI, sustainment management) needs to be further refined. The results show the different
perspectives of the stakeholders on WSM.
5.5.2.2 WSD design SWOT analysis
Table 5.4 summarizes the view of stakeholders captured in the SWOT analysis of the
conceptual WSD design.
Table 5.4 WSD Design Stakeholder Assessment Results
Strengths
� Reliance on approved design/certification organizations
Weaknesses
� Role of ASC/EN versus LCSO seems inefficient
� Extensive WSD organization despite reliance on approved foreign airworthiness authority
� Approval of the MTCH organization by the NL MAA
� WSD design does not take into account the Air System (training system) approach of the F-35
Opportunities
� Efficient WSD organization by relying on approved foreign airworthiness authority
Threats
� The proposed design seems to have no synergy between MAR-OPS/Subpart M and MAR-21
functionality within WSM construct
The analysis shows a limited response of stakeholders on the WSD design. In the proposed
design the prime function of the WSD is sustaining the MTC. The MAR-21 requirements play
an essential role in organizing the WSD. For a stakeholder to assess the proposed design
requires in-depth knowledge of the MAR-21 requirements which might be the explanation for
the limited response on the WSD design. The stakeholders that provided input support the
strategy to sustain the MTC, certification by validation, which requires and approved foreign
airworthiness authority. Weaknesses of the design specifically focus on the size of the
organization and the scope. Synergy within the NL WSM organization could be achieved by
including MAR-OPS/Subpart M (maintenance management tasks) in the WSD function. The
WSD contains the technical knowledge within the WSM construct. This could be utilized to
perform MAR-OPS/Subpart M functions. This might lead to role inconsistency between the
operator and the MTCHO.
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6 CONCLUSIONS AND RECOMMENDATIONS
6.1 Conclusions
The objective of this research is to provide recommendations to the NL DMO for organizing a
WSD responsible for air-based weapon systems in a PBL environment during the
sustainment phase in order to control weapon system cost-effectiveness. During the
execution of this research it became obvious that organizing the WSD highly depends on the
way WSM is organized within the NL MOD. This research revealed five area’s for
improvement:
Effective control of weapon system cost-effectiveness
This research revealed that WSM requires an AMC approach to effectively control weapon
system cost-effectiveness in a PBL product support environment. The high financial volume
for sustaining an air-based weapon system, the dependency on the PBL provider and the
limited perspective of the PBL provider on cost-effectiveness (the PBA contracting period)
over the total life cycle of the weapon system requires the NL MOD to reduce risks on the
government part. This can be achieved by using AMC to control weapon system
effectiveness and costs. The case study revealed that implementing AMC is possible. One of
the major issues with applying AMC in a PBL environment is providing insight in cost drivers.
The cost structure in a PBL environment is based on the cost per flight hour. Managing these
costs is the responsibility of the PBL provider. To support WSM, more insight is required in
the cost structure of the PBL provider in order to identify cost drivers affecting the LCC of the
weapon system. In addition the AMC LCM model needs to be adapted to the specific system
entities and characteristics of air-based weapon systems.
Effective WSM and WSD organization structure
This research indicates that WSM within the NL MOD is effectively supported by a matrix
organization structural configuration. The WSM environment is highly complex which results
in extensive horizontal coordination and decentralized decision-making. This is best
supported by horizontal organization structures like a matrix organization. Prime
responsibility for WSM should be assigned to the OPCO. WSM requires a multi-disciplinary
approach. The WSM matrix organization structure should incorporate the required WSM
functional elements; operations, logistics, engineering, information management, financial
control and contracting. From a NL MOD perspective, the international environment in which
air-based weapon systems are managed requires integration (liaison) functions to be
established in the international sustainment organization to increase coordination with this
Petrick Spitters AMC MSc
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organization and to secure NL MOD interests in sustainment of the weapon system. This
includes the NL PSM role in the PBL product support concept.
Clear responsibility and authority structure
Effective WSM requires responsibility and authority to be balanced and matched to the
function of the organization. The PBL environment requires a clear structure of responsibility
and authority for PBL to be effective. Because the PSI is primarily responsible for
sustainment of the weapon system and the sustainment is managed on the basis of weapon
system performance the WSM role is focused on ensure weapon system cost-effectiveness
over the total life cycle by overseeing the PSI and operator activities and performance. This
research indicates that WSM responsibility and authority should be assigned to the OPCO in
the NL MOD WSM construct. Managing the sustainment of air-based weapon systems takes
place in an international environment which requires integration with the NL MOD WSM
construct and a clear structure of responsibility and authority between these organizations.
WSM consultation structure adapted to PBL
This research revealed that the WSM consultation structure needs to adapt to the PBL
product support concept. WSM consultation is a tri-partite consultation between the PSI,
operator and PSM. The PSM has responsibility and authority in this construct, in case of NL
WSM this is the role of the OPCO.
Sustained WSM knowledge
In support of WSM, knowledge in PBL/PBA concepts, management control, weapon system
(technical), weapon system utilization and logistic support engineering is required. In addition
the matrix organization structure requires organizational members trained in working in a
matrix organization environment (dual lines of responsibility). In a PBL product support
concept a main part of the sustainment activities are outsourced to the PBL provider. This
could lead to a decrease in WSM knowledge required to act as a smart customer. This can
be countered by several measures like the organization structure (matrix organization as a
cross-functional team), creation of integration positions (liaison function) in an international
sustainment organization, performing depot level maintenance under the PSI and involving
NL research institutes in key niches of sustainment (e.g. force life management, PBL and
weapon system utilization).
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Main Conclusion
With regard to the research question and considering the conclusions this research indicates
that, in the proposed WSM construct, the function of the WSD is to sustain the Military Type
Certificate and to provide the weapon system technical knowledge. It seems that this is best
supported by a divisional WSD organization structure. The WSD is responsible for sustaining
the MTC and supporting the WSM construct with weapon system technical knowledge. WSD
responsibility and authority depends on the privileges granted by the NL MAA based on the
MTCHOE.
6.2 Recommendations
Based on the research results achieved, the following recommendations are made with
regard to organizing WSM and the WSD for air-based weapon systems with a PBL product
support concept:
Weapon System Management
� Adopt the AMC approach to control weapon system cost-effectiveness in a PBL
environment. Construct an operational LCM model in support of WSM suitable for air-
based weapon systems.
� Make arrangements with PSI to gain access to cost information in support of the LCM
model.
� Organize WSM in a matrix organization structure.
� Assign WSM responsibility and authority to one single actor.
� Adapt the WSM consultation structure to the PBL environment by incorporating the
PSI in the NL WSM consultation structure.
� Add PBL/PBA concepts and management control knowledge to the WSM master
class. Gain experience with PBL/PBA arrangements for air-based weapon systems
before introducing this support strategy for a complete weapon system.
� Take measures to sustain WSM knowledge in the organization in order to maintain a
smart customer.
\Weapon System Department
� Assign the MTCH function to the WSD making the WSD responsible for sustaining
the MTC.
� Adapt a divisional organization structure for the WSD.
� Integrate WSD organization in WSM matrix organization structure.
� Approve a foreign aviation authority and/or accredit a design organization to support
the certification by validation process.
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F-35 Weapon System Management
� Create liaison position in JSFPO Director of Sustainment organization to coordinate
and ensure PSM on NL F-35 fleet.
� Ensure adequate insight in the F-35 sustainment costs and cost framework in support
of an operational LCM model.
The following subjects are recommended for further research:
� An effective organization culture to support WSM within the NL MOD.
� Enlarged WSM scope with a focus on the F-35 Air System (training system and
support system).
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LIST OF ABBREVIATIONS
AD Airworthiness Directive
AED Army Engineering Directorate
AGCDS Aanschrijving Gereedstelling Commandant der Strijdkrachten
ALAC Autonomic Logistics Advisory Council
ALGS Autonomic Logistics Global Sustainment
ALGSo ALGS organization
ALIS Autonomic Logistics Information System
AM Asset Manager
AMC Asset Management Control
AMCS AMC System
AMICO Asset Management Information and Communication
AO Asset Owner
AR Action Request
AS Air System
ASB Air System Branch
ASC/EN Aeronautical System Command/Engineering
ASR Air System Requirements
AV Air Vehicle
AVA AV Availability
AVPHM AV Prognostic Health Management
BP Business Plan
CANSPTFH Cannibalizations Per Thousand Flight Hours
CD Cost Drivers
CDS Commandant Der Strijdkrachten
CMMS Computerized Maintenance Management System
CP Change Proposal
CRM Customer Relationship Management
CPP Cooperative Participant Position
CSR Composite Share Ratio
DA Design Authority
DAA Delegated Airworthiness Agent
DAU Defense Acquisition University
DEP Defence Exploitation Budget
DGM Defence Governance Model
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DMS Diminishing Manufacturing Sources
DO Directorate of Operations
DoS Director of Sustainment
DVO Dienstverleningsovereenkomst
DPM Defence Planning Memorandum
DWS Directorate of Weapon Systems
D-WSPM Director Weapon System Program Manager
ECP Engineering Change Proposal
EMAR Engine Mission Abort Rate
E-NMC Engine Not Mission Capable
FMC Full Mission Capable
FRP Full Rate Production
FSE Field Support Engineer
HDFC Head Directorate Financial Control
HLD MATLOG High Level Design Materiel Logistics
HDP Head Directorate Personnel
ILS Integrated Logistics Support
IMC Instrumental Meteorological Conditions
JCCB JSF Configuration Control Board
JCS JSF Contract Specification
JESB JSF Executive Steering Board
JIVC Joint IV Command
JOP Training Program
JSF Joint Strike Fighter
JSFPO JSF Program Office
LCC Life Cycle Cost
LCM Life Cycle Management
LCN Logistic Control Number
LCSO Life Cycle Support Office
LCW Logistic Centre Woensdrecht
LDSS Logistic Decision Support System
LMAero Lockheed Martin Aeronautics
LPC Logistic Process Cycle
LRC Line Replaceable Component
LRIP Low Rate Initial Production
LST Lightning Support Team
MAR Military Aviation Requirements
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MC Mission Capable
ME Maintenance Engineering
MEFL Mission Essential Function List
MMH/FH Maintenance Man Hours per Flight Hour
MoA Memorandum of Agreement
MOU Memorandum Of Understanding
MSTC Military Supplemental Type Certificate
MTC Military Type Certificate
MTCH MTC Holder
MTCHO MTCH Organization
MTCHOE MTCHO Exposition
NAVAIR NAVal Air
NCCB National Configuration Control Board
ND National Deputy
NL The Netherlands
NL DMO NL Defence Materiel Organisation
NL MAA NL Military Aviation Authority
NL MOD NL Ministry of Defence
NS ‘Normsteller’ Standards Framework manager
OAG Operation Advisory Group
OAK Operational Activity Calendar
OBPHM On Board Prognostic Health Management
OEM Original Equipment Manufacturer
OPCO Operational Commander
OPM Optimum Performance Mission
ORD Operational Requirements Document
OTI Operational Tempo Increase
PBA Performance Based Agreement
PBL Performance Based Logistics
PEO Program Executive Officer
PFHF Percentage Flight Hours Flown
PHE Post Holder Engineering
PHM Prognostic Health Management
PK Performance Killer
PM Product Management
PSF Percentage Sorties Flown
PSFD MOU Production Sustainment and Follow-on Development MOU
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PSI Product Support Integrator
PSM Product Support Manager
PSP Product Support Provider
P&W Pratt and Whitney
RNLAF Royal Netherlands Air Force
ROI Return On Investment
SAG Sustainment Advisory Group
SCE System Cost Effectiveness
SCM Supply Chain Management
SDD System Design and Development
SLA Service Level Agreement
SM Sustainment Management
SPMS Sustainment Performance Management System
SSE System Support Engineering
SWG Senior Warfighters Group
SysCom System Commands
TOR Terms Of Reference
TOW Time On Wing
US DOD United States Department Of Defense
VMC Visual Meteorological Conditions
WSD Weapon System Department
WSM Weapon System Management
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LIST OF FIGURES
Figure Page
Figure 1.1 Cost-effectiveness according to Stavenuiter (2002) 3
Figure 1.2 Asset Management Control System according to Stavenuiter (2002) 4
Figure 2.1 Management Control System of De Leeuw (1990 and 2002) 9
Figure 2.2 Research Model 11
Figure 3.1 Risk Transfer with different product support options
[PBL Support Guidebook, 2002] 13
Figure 3.2 The Product Support Business Management highlights
[PSM Guidebook, 2011] 14
Figure 3.3 The Logistic Process Cycle 17
Figure 3.4 Asset Management Control System according to Stavenuiter (2002) 17
Figure 3.5 Organization according to De Leeuw (1990) 19
Figure 3.6 Generalized Contingency Approach [De Leeuw, 2002] 21
Figure 3.7 Organization Environment 22
Figure 3.8 Management Context 23
Figure 3.9 Organization Culture 24
Figure 3.10 WSM Ideal Model according to the NL MOD 27
Figure 3.11 Structure Airworthiness Regulations 28
Figure 3.12 Weapon System Management Triangle 30
Figure 4.1 AMC in a PBL product support concept 34
Figure 4.2 AMC in PBL production process 37
Figure 4.3 Actors in NL MOD WSM 42
Figure 5.1 Actor Definition Model F-35 58
Figure 5.2 F-35 LCM Team 59
Figure 5.3 NL DMO Weapon System Portal 64
Figure 5.4 WSM approach Blueprint Matlog perspective 76
Figure 5.5 F-35 Sustainment Concept 77
Figure 5.6 Conceptual NL WSM approach in a PBL environment 78
Figure 5.7 F-35 NL WSM Production Process 79
Figure 5.8 NL WSM matrix organization 82
Figure 5.9 Basic WSD Process 86
Figure 5.10 F-35A CTOL Airworthiness Constellation 87
Figure 5.11 F-35 WSD Organization Structure 89
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LIST OF TABLES
Figure Page
Table 3.1 Structural Parameters 20
Table 5.1 Cost Structure F-35 Program 62
Table 5.2 MTCHO Privileges 85
Table 5.3 WSM Design Stakeholder Assessment Results 91
Table 5.4 WSD Design Stakeholder Assessment Results 92
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ANNEX(S)
A – NL MOD
A.1 NL MOD Organization
A.2 Functions Air System Branch departments
A.3 Tasks and responsibilities WSM
A.4 HLD MatLog System Logistics
B – Organization functions
B.1 Organization functions in AMC (Sustainment phase)
B.2 Organizational function analysis
B.3 Organizational functions, responsibilities and authority within the WSM field
C – Design principles of De Leeuw
D – AMC Business Realization design approach
E – F-35 Sustainment Management System Characteristics
F – F-35 System Definition and Characteristics Data
G – Stakeholder Assessment
F.1 Stakeholder Assessment Set up
F.2 Stakeholder Assessment Presentation
F.3 Stakeholder Assessment dry-run results
F.4 Stakeholder Assessment Individual Results
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A – NL MOD
A.1 NL MOD Organization
A.2 Functions Air System Branch departments
A.3 Tasks and responsibilities WSM
A.4 HLD MatLog System Logistics
A.1 NL MOD Organization
After the introduction of the Defence Governance Model in 2003 the Defence organization
restructured which has led to the present organization structure. The NL DMO is part of the
Netherlands Ministry of Defence (NL MOD). Figure 1.1 shows the NL MOD organization.
Figure A.1 NL MOD [MOD intranet, 2009]
The NL DMO (figure A.1) is a service center that is responsible for materiel used by the
Defence organization throughout its life: from procurement to major maintenance to
disposal. The NL DMO is also responsible for formulating internal materiel policy for the
NL MOD [NL DMO Communication Section, 2009].
Minister of Defence
State Secretary for
Defence
Secretary-General
Inspector-General
of the Armed
Forces
Director-General
of Finance and
Control
Director-General
of the Defence
Materiel
Organisation
Chief of DefenceDirector of
Personnel
Director of
General Policy
Affairs
Defence Materiel
Organisation
Commander of the
Royal Netherlands
Navy
Commander of the
Royal Netherlands
Army
Commander of the
Royal Netherlands
Marechaussee
Commander of the
Royal Netherlands
Air Force
Commander of the
Support Command
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Figure A.2 NL DMO [DMO Communication Section, 2009]
The Directorate of Projects and Procurement (DP&V) is responsible for the process of
providing materiel which consists of procurement and project management. The project
branch is responsible for carrying out category 1 materiel projects. Category 1 materiel
projects have a large financial scope and, potentially, political sensitivity [NL DMO
Communication Section, 2009]. In the context of this research DP&V has the responsibility
for the project ‘Replacement of the F16 Fighter Aircraft’ (VF-16).
The Directorate of Logistic Agencies consists of the Naval Maintenance and Service Agency,
National Supply Agency (primarily Army oriented) and the Woensdrecht Logistic Agency (air-
based systems oriented). The Woensdrecht Logistic Agency (LCW) provides all aircraft
related materiel (consumables and repairables) to the operator and provides intermediate
and depot level maintenance to the aircraft and or aircraft systems. With respect to the
MAR’s LCW has an MLE-145 (maintenance organization) and MLE-DSO (supply
organization) approval. In the MOD WSM concept LCW has the role of the maintainer. The
Logistic Agencies are transferred to the Operational Commanders under the current
reorganization effort.
The Directorate of Weapon Systems (DWS) consists of 3 branches; Sea Systems, Land
Systems and Air Systems (figure A.3).
Director Defence Materiel Organisation
Directorate of Weapon Systems
Directorate of Logistic
Establishments
Transition Manager
Directorate of Projects &
Procurement
Directorate of Planning & Control
Directorate of Materiel Policy
General Support Branch
Directorate of Personnel & Organisation
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Figure A.3 DMO/Weapon Systems
The DWS Air Systems Branch ensures the availability of weapon systems (mainly air-based
systems) that are suitable for the mission, that function properly, the airworthiness of that
materiel, the safe use of weapon systems and the upkeep of weapon systems [NL DMO
Communication Section, 2009]. The main tasks include product management, WSM
(including configuration management and Integrated Logistics Support), support for contract
management and being the holder of the Military Type Certificate. Product Management is
concerned with the operational units and their requirements for new materiel or for the
upkeep of existing materiel [NL DMO Communication Section, 2009]. WSM is concerned
with the cost-effective sustainment of the weapon systems within the set pre-conditions [Moll,
2008]. Within NL DMO Configuration Management and Integrated Logistics Support is part of
WSM. Integrated Logistics Support (ILS) is a composite of all support considerations
necessary to assure the effective and economical support of a system or equipment at all
levels of maintenance for its programmed life cycle [Blanchard, 2004]. Configuration
Management identifies the functional and physical characteristics of an item, controls
changes to those characteristics, and records and reports change processing and
implementation status [Blanchard, 2004]. With the implementation of the Military
Airworthiness Requirements the DWS Air Systems Branch is designated as the holder of the
Military Type Certificate (MTC) and performs the tasks necessary to sustain the MTC
[MTCHOE, 2007]. The MTC is granted by the Military Airworthiness Authority (MAA) and is a
declaration that the aircraft type complies with applicable airworthiness requirements
[MTCHOE, 2007].
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A.2 Functions Air System Branch departments
Section System Management
� Integrated Logistic Support function
- sustainment concept
- ILS plan
- standard framework logistic support chain
- weapon system related policy and regulation
� Planning & Control function
- monitor of system and logistic support standards
- system and logistic support analysis
- advising efficient exploitation of weapon system
- business plan and budget plan (input SLA with operator)
- draft department plans and weapon system reports
� Quality Management (intern department)
- maintaining department quality system
- POC for MAA and Operator
Section Type Management
� Product management
- Determine functional and technical specifications
- modification proposal
� Configuration Management
- responsible for configuration baseline
- configuration identification and control for new (sub)systems
� Project management
- project manager of mandated projects
- advising operator operational requirements
� Quality Management
- initiate, execute and control all required activities to maintain a (S)MTC
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Section Maintenance Engineering
� Product Management
- manage functional system design
- analyze safety reports (technical), incidents and mishaps
- manage and draft system documentation
� Configuration Management
- configuration identification and control of present system configuration
- configuration status accounting
� Project Management
- Support Type Management with project
- project management of small sustainment projects
� Quality management
- propose improvements regarding system performance and logistic support
performance
� ILS management
- analyzing system and logistic support performance
Section Liaison Function
� Intermediary at OEM and/or Partner Nation
� Representation NL at OEM/Partner Nation
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A.3 Tasks and responsibilities WSM
Staff RNLAF
• On behalf of C-RNLAF decision-making authority of the weapon system Roadmap;
• Incorporating AGCDS requirements in RNLAF Business Plans;
• determine customer demand NL DMO
• draft concept SLA (RNLAF part);
• contracting SLA with NL DMO;
• Manage Roadmap;
• budget-holder RNLAF (sustainment) budget;
• determine requirements bandwidth projects;
• determine priorities and coordinate changes of Roadmap;
• draft accountability report when deviations from standard;
• providing advice procurement process;
• Optimize RNLAF maintenance processes.
RNLAF Base Commander
• Perform mission assignment (derived from RNLAF Business Plans and SLA’s);
• Perform preventive and corrective maintenance;
• draft accountability report;
• provide advice on Roadmap;
• Identify and provide issues.
NL DMO (Weapon System Departments)
• Setting standards MATLOG (maintenance and supply);
• Provide information regarding Roadmap (status projects, modifications, internal
programs, financial and personnel aspects);
• draft accountability report SLA ;
• budget-holder NL DMO (sustainment) budget;
• Providing technical advice;
• draft concept SLA (DVO), NL DMO part;
• Execute SLA (DVO);
• Manage investment projects (bandwidth and DMP);
• Determine configuration baseline MLE-21 (Configuration Management);
• Manage Military Type Certificate (MTC);
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• Prepare modifications (pre-conditions, project management, certification);
• draft and manage system plan;
• Analyze ILS (improvement proposals, data collections);
• Provide information on obsolescence.
• Provide technical advice (sustainment knowledge).
NL DMO (Logistic Center Woensdrecht)
• provide serviceable repairables and non-repairables (consumables);
• perform preventive and corrective maintanace;
• Maintain (internal and external);
• Perform modifications;
• Provide information regarding Roadmap (status projects, modifications, internal
programs, financial and personnel aspects);
• Manage stock (Supply Chain Management);
• Manage distribution process;
• Manage sustainment knowledge;
• Provide Quick Reaction Teams;
• draft SLA (DVO) LCW part;
• Execute SLA (DVO).
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A.4 HLD MatLog System Logistics
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Annex B – Organization functions in AMC (Sustainment phase)
B.1 Organization functions in AMC (Sustainment phase)
Engineering and logistics management
System support engineering
Maintenance engineering
Financial engineering
Utilization feedback
Project management
Program management
Project planning
Program planning
Information management
Documentation management
Risk management
Quality management
Product purchase control
Configuration management
Change management
Supply and store policy management
Resource planning and control
Facility policy and management
Purchasing
Training
Maintenance
Operational
Intermediate
Depot
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B.2 – Organizational function analysis
Figure D.1 Theoretical Perspective
PBL Support environment
Designer Maintainer Operator PSI
Controlling Weapon System Cost-effectiveness x x x PGovernment maintains an oversight role (Product Support Manager)
System Support Engineering X FMaintenance Engineering X X FFinancial Engineering X X P Operator keeps financial control over PBAUtilization Feedback X Project Management X X P Maintainer role is transferred to PSIProgram Management X X P Maintainer role is transferred to PSIProject Planning X X P Maintainer role is transferred to PSIProgram Planning X X P Maintainer role is transferred to PSIInformation Management X X P Maintainer role is transferred to PSIDocumentation Management X X FRisk and Quality Management X X X P Maintainer role is transferred to PSIProduct purchase control X FConfiguration/Change management X X FSupply/Store policy management X X FResource planning and control X Ffacility policy and management X X
X X F
X X F
Operational X
Intermediate X X PIntermediate level maintenance by operator is possible
Depot X X F
Remarks
Purchasing
Training
Maintenance
Organizational Functions and Tasks
Engineering and Logistic Management
Traditional Logistic Support environment
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Figure D.2 The NL DMO Perspective
System Manager Maintainer Operator WSMControlling Weapon System Cost-effectiveness x
System Support Engineering XMaintenance Engineering XFinancial Engineering X X XUtilization Feedback XProject Management X X XProgram Management X X XProject Planning X X XProgram Planning X X XInformation Management X Documentation Management X Risk and Quality Management X X Product purchase control X XConfiguration/Change management X Supply/Store policy management X X XResource planning and control X X X Xfacility policy and management X X
X X
X X X X
Operational XIntermediate X XDepot X X
Purchasing
Training
Maintenance
Organizational Functions and TasksNL MOD Logistic Support environment
Remarks
Engineering and Logistic Management
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B.3 – Organizational functions, responsibilities and authority within the WSM field
Figure D.3 Responsibility and Authority
Responsibility AuthorityControlling Weapon System Cost-effectiveness WSM CLSK Operator (CLSK) has final authority
System Support Engineering WSD WSD and MAA WSD has delegated authority depending on privileges provided by MAA
Maintenance Engineering WSD WSD and MAA WSD has delegated authority depending on privileges provided by MAA
Financial Engineering DOBBP, CLSK, DF&C DF&CUtilization Feedback CLSK CLSK
Project Management WSD, LCW and DP&V WSD, LCW and DP&VDP&V is responsible for category 1 materiel projects, WSD for mandated projects and LCW for sustainement projects (up to a certain financial size)
Program Management CLSK and WSD WSMProject Planning WSD, LCW and DP&V WSMProgram Planning CLSK and WSD WSMInformation Management DIO, !VENT DIO, !VENTDocumentation Management WSD WSD
Risk and Quality Management CLSK, MAA and QAD CLSK, MAA and QAD
Operational Risk Management (ORM) is responsibility of operator (CLSK), risk involving airworthiness is the MAA and quality management is the responsibility of the Quality Assurance Departments within CLSK or DMO. Quality Assurance related to support contracts is the responsibility of TDL.
Product purchase control LCW and DP&V LCW and DP&V
Configuration/Change management WSD, NCCB WSD, NCCB, WSMPrime responsible is the WSD as chairman of the National Configuration Control Board (NCCB).
Supply/Store policy management WSD and LCW WSM WSD is responsible for the standards frameworkResource planning and control CLSK, WSD, LCW WSMfacility policy and management DVD DVD
Operational CLSK CLSKIntermediate CLSK and LCW CLSK and LCWDepot LCW and industry LCW
LCW and DP&V
Maintenance
Organizational Functions and TasksNL MOD Logistic Support environment
Remarks
Engineering and Logistic Management
Purchasing
Training CLSK CLSK
LCW and DP&V
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Annex C – Design principles of De Leeuw
Design principles of De Leeuw
a. Decomposition principle
Organizations (or subsystems) must consist of autonomous subsystem (in relation to
decentralization and functionalization)
b. Consonance principle
When designing an organization the new structure of a subsystem must be consistent
with the remaining or existing structure and culture
c. Flexibility principle
Organization flexibility must relate to the unpredictability and uncontrollability
d. Hierarchy principle
Complex organization must have a hierarchical structure
e. Delegation principle
Maximum delegation but not further then the coordination need requires
f. Standardization principle
Standardize as far as predictability requires (be aware of the required flexibility)
g. Formalization principle
Formalization is a possible form of standardization and should be applied when
predictability is high.
h. Participation
Involve stakeholders in the design process.
i. Division of labor
See Mintzberg
j. Authority and responsibility
Authority and responsibility in the actual structure must be in balance
k. Task and function
Relation with the division of labor (i) and must be consistent.
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Annex D AMC Business Realization design approach
The requirements in the TOR are the basis for the design phase. The WSM and WSD design
uses AMC as the starting point. As identified in the TOR’s, AMC is applied to control weapon
system cost-effectiveness in a PBL environment. Figure 5.1 shows the AMC business
realization. This six step approach is used to organize WSM for the F-35 weapon system. A
basic prerequisite for the design is the F-35 sustainment concept. Annex D provides an
introduction in the F-35 sustainment management concept.
Figure 5.1 The AMC Business Realization [Stavenuiter, 2002]
1. Get Organized. This step provides the structuring of the weapon system, the LCM
team and the data and product flow (paragraph 5.3.1).
2. Get Oriented. This step analyzes the operational need, system functionality,
installation performance and budget/cost estimate (paragraph 5.3.2).
3. Get Practiced. The required training program for the various actors is defined in this
step (paragraph 5.3.3).
4. Get Real. This step defines the Logistic Program consisting of weapon system
requirements, system structure, logistic plans and cost estimation/budgets (paragraph
5.3.4).
5. Get Across. As discussed in the TOR’s an LCM model is required for effective
management control of an air-based weapon system (paragraph 5.3.5).
6. Get Grip. Control over weapon system cost-effectiveness is achieved by controlling
the logistic processes. This requires the preconditions for control to be met
(paragraph 5.3.6).
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This six step approach contains the pre-conditions to fulfill the objective of WSM. The next
phase is designing the WSM organization and to determine the role of the WSD. The final
step is designing the WSD based on its role in the NL MOD F-35 WSM concept.
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Annex E F-35 Sustainment Management System Characteristics
One of the candidates to replace the F
fighter aircraft consists of the F
STOVL, and F-35C CV (Carrier Variant) variants. The intended replacement of the F
the F-35 CTOL. The F-35 Lightni
of Defense (US DOD), is a joint, multi
to the U.S. Air Force (USAF), U.S. Navy (USN), U.S. Marine Corps (USMC), eight
international Participants including The Netherlands, and future Foreign Military Sales (FMS)
customers [SMS, 2010]. The program is managed by the JSF Program Office (
"requirements pillars" - Survivability, Lethality, Supportability and Affordability
identified during the Concept Definition Phase that best represent the essential F
characteristics. Balanced implementation of these pillars ensures that the F
design meets war fighter requirements, as documented in the Operational Requirements
Document (ORD), at the most affordable cost.
The F-35 Air System. The F-35 Air System consists of the air vehicle, including the
propulsion system, and the autonomic logistics system (figure F.1). Team JSF consisting of
Lockheed Martin, Northrop Grumman en
Autonomic Logistics Global Support (ALGS) system. Pratt &
contracted by the JSFPO for the propulsion system (F135 engine).
F-35 logistics and support (ALGS)
Training, Information Systems and Support Systems. The F
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35 Sustainment Management System Characteristics
One of the candidates to replace the F-16 fighter aircraft is the F-35. The F
fighter aircraft consists of the F-35A CTOL (Conventional Take-Off and Landing), F
35C CV (Carrier Variant) variants. The intended replacement of the F
35 Lightning II Program, established by the United States Department
of Defense (US DOD), is a joint, multi-national program that will deliver the F
to the U.S. Air Force (USAF), U.S. Navy (USN), U.S. Marine Corps (USMC), eight
ts including The Netherlands, and future Foreign Military Sales (FMS)
customers [SMS, 2010]. The program is managed by the JSF Program Office (
Survivability, Lethality, Supportability and Affordability
d during the Concept Definition Phase that best represent the essential F
characteristics. Balanced implementation of these pillars ensures that the F
requirements, as documented in the Operational Requirements
ument (ORD), at the most affordable cost.
35 Air System consists of the air vehicle, including the
propulsion system, and the autonomic logistics system (figure F.1). Team JSF consisting of
Lockheed Martin, Northrop Grumman en BAE Systems develops the air vehicle and
Autonomic Logistics Global Support (ALGS) system. Pratt & Whitney is separately
for the propulsion system (F135 engine).
Figure F.1 The F
35 logistics and support (ALGS) will consist of an integrated system that consists of
Training, Information Systems and Support Systems. The F-35 Training System includes
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The F-35 family of strike
Off and Landing), F-35B
35C CV (Carrier Variant) variants. The intended replacement of the F-16 is
ng II Program, established by the United States Department
national program that will deliver the F-35 Air System
to the U.S. Air Force (USAF), U.S. Navy (USN), U.S. Marine Corps (USMC), eight
ts including The Netherlands, and future Foreign Military Sales (FMS)
customers [SMS, 2010]. The program is managed by the JSF Program Office (JSFPO). Four
Survivability, Lethality, Supportability and Affordability - were
d during the Concept Definition Phase that best represent the essential F-35
characteristics. Balanced implementation of these pillars ensures that the F-35 Air System
requirements, as documented in the Operational Requirements
35 Air System consists of the air vehicle, including the
propulsion system, and the autonomic logistics system (figure F.1). Team JSF consisting of
BAE Systems develops the air vehicle and
is separately
Figure F.1 The F-35 Air System
will consist of an integrated system that consists of
35 Training System includes
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instructional courseware, training devices, a training management system, a training system
support center and a training center for pilots and maintainers. The Autonomic Logistics
Information System (ALIS) serves as: an information portal to F
systems; implementation of logistics processes; and provides sustainment/logistic decision
aids. Support Systems include support equipment, maintenance support, spares, supply
chain management, technical data and customer support services. The F
employs a two- level maintenance concept consisting of government organizational level
maintenance and government/industry partnership depot maintenance. Figure F.2 shows the
ALGS functionality.
Logistics and support is being acquired as an integral part of the F
is to design an F-35 logistics system that is proactive
and initiate the correct response "autonomically" (without human intervention). This will
greatly reduce the human actions required to maintain the F
the readiness and sustainability of the F
information technology and integrated logistics concepts, coupled with high reliability and a
robust PHM system, will facilitate a condition
taking advantage of cost efficiencies not available to previous weapons systems.
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instructional courseware, training devices, a training management system, a training system
ining center for pilots and maintainers. The Autonomic Logistics
Information System (ALIS) serves as: an information portal to F-35-unique and external
systems; implementation of logistics processes; and provides sustainment/logistic decision
Systems include support equipment, maintenance support, spares, supply
chain management, technical data and customer support services. The F-35 support concept
level maintenance concept consisting of government organizational level
nce and government/industry partnership depot maintenance. Figure F.2 shows the
Figure F.2 ALGS Functionality
Logistics and support is being acquired as an integral part of the F-35 Air System. The goal
5 logistics system that is proactive - a system that will recognize a problem
and initiate the correct response "autonomically" (without human intervention). This will
greatly reduce the human actions required to maintain the F-35 and more effectively mana
the readiness and sustainability of the F-35 fleet on a real-time basis. Innovations in
information technology and integrated logistics concepts, coupled with high reliability and a
robust PHM system, will facilitate a condition-based support and maintenance scheme,
taking advantage of cost efficiencies not available to previous weapons systems.
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instructional courseware, training devices, a training management system, a training system
ining center for pilots and maintainers. The Autonomic Logistics
unique and external
systems; implementation of logistics processes; and provides sustainment/logistic decision
Systems include support equipment, maintenance support, spares, supply
35 support concept
level maintenance concept consisting of government organizational level
nce and government/industry partnership depot maintenance. Figure F.2 shows the
Figure F.2 ALGS Functionality
35 Air System. The goal
a system that will recognize a problem
and initiate the correct response "autonomically" (without human intervention). This will
35 and more effectively manage
time basis. Innovations in
information technology and integrated logistics concepts, coupled with high reliability and a
nance scheme,
taking advantage of cost efficiencies not available to previous weapons systems.
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F-35 Sustainment. The sustainment concept for the F-35 is based on performance-based
lifecycle support that differs significantly from conventional legacy platforms. The overarching
strategy for F-35 JSF Sustainment is to deliver the most affordable, operationally suitable
and effective, performance-based sustainment solution to the United States (U.S.) and
International War fighters. The performance-based sustainment approach is jointly
implemented by the following stakeholders: Warfighter; JSF Program Office (JSFPO); Team
JSF (Lockheed Martin (LM), Northrop Grumman Corporation (NGC), and BAE SYSTEMS);
Propulsion System Contractors (PSCs) (Pratt and Whitney (P&W) and GE-Rolls Royce
Fighter Engine Team (GE-RR FET)); Global Industrial Base (Suppliers and Organic Depots/
Fleet Readiness Centers) [ALGS Implementation Plan, 2010]. The F-35 sustainment
approach is laid down in several key sustainment documents (figure F.3).
Figure F.3 F-35 Key Sustainment Documents
The key document is the F-35 Sustainment Management Strategy which provides the
sustainment concept. As an interface between the SMS and the sustainment policies and
instructions of the Services, Sustainment Operating Instructions are developed. (In the F-35
Program Performance-Based Logistics (PBL) is defined as a product life cycle support
concept that allows a customer to define levels of performance outcome for the entire F-35
Lightning II Air System during full-rate sustainment phase of the program and provides the
contractor with the authority and accountability to meet the contracted levels of performance
(figure F.4).
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A Product Support Arrangement (PSA) between the
required performance and operational planning of the participants in the program. The
JSFPO consolidates requirements of the participants and contracts the PSI’s for del
weapon system performance to the participants (Performance Based Arrangement). The
PBA identifies the performance metrics, the required level of performance (threshold) and
incentivized levels of performance (target). The following performance metr
a. Aircraft Availability
b. Mission Capability
c. Mission Effectiveness
d. Percent Sorties Flown
e. Percent Flight Hours Flown
f. Maintenance Man
g. Logistic Footprint Delta
h. Cannibalization Rate
PBA performance is measured and monito
Management System (SPMS).
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Figure F.4 F-35 Performance
A Product Support Arrangement (PSA) between the war fighter and JSFPO
required performance and operational planning of the participants in the program. The
consolidates requirements of the participants and contracts the PSI’s for del
weapon system performance to the participants (Performance Based Arrangement). The
PBA identifies the performance metrics, the required level of performance (threshold) and
incentivized levels of performance (target). The following performance metr
Aircraft Availability
Mission Capability
Mission Effectiveness
Percent Sorties Flown
Percent Flight Hours Flown
Man-hours per Flight Hour
Logistic Footprint Delta
Cannibalization Rate
PBA performance is measured and monitored through the Sustainment Performance
Management System (SPMS).
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35 Performance-based process
JSFPO contains the
required performance and operational planning of the participants in the program. The
consolidates requirements of the participants and contracts the PSI’s for delivering
weapon system performance to the participants (Performance Based Arrangement). The
PBA identifies the performance metrics, the required level of performance (threshold) and
incentivized levels of performance (target). The following performance metrics are identified:
Sustainment Performance
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F-35 Program Management. The JSFPO F-35 Program Executive Officer (PEO) has the
responsibility, authority, and accountability for the program. The F-35 PEO has responsibility
to plan, direct, control and use resources within the scope of his/her authority. The F-35
JSFPO will serve as the single government point of accountability for all sustainment
activities. The JSFPO structure consists of four prime directorates: International Directorate,
Directorate of Engineering, the Weapon System Program Manager and the Director of
Logistics. The program participants, NL MOD, have a representative (National Deputy
including an Assistant national Deputy) in the program which fulfills a liaison function. The
Director of Engineering is responsible for all engineering activities. The Weapon System
Program Manager is responsible for F-35 Air System development and production. The
Director of Logistics is responsible for F-35 Sustainment. Figure F.5 shows the organization
structure.
Figure F.5 JSFPO organization structure
The Lightning Support Team (LST) resides under the Director of Sustainment. The LST
fulfills the daily management of the F-35 fleet. The LST is responsible the release of
technical products (repair instructions, modifications, technical advice) and fleet management
activities. The LST organization is a contractor/government entity (figure F.6).
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Figure F.6 LST organization
To direct the program, governance structure is developed for the US Services and partners
in the program (figure F.7). The Production Sustainment and Follow-on Development (PSFD)
Memorandum of Understanding (MOU) is the high level document that describes the
governance structure of the F-35 Program.
Figure F.7 F-35 Program Governance Structure
From a sustainment management perspective the following entities from the governance
structure are relevant:
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The JESB is a Senior Flag and SES forum for discussion, consultation and decision-making.
The forum focuses on F-35 Program issues. The F-35 PEO serves as the JESB’s Executive
Secretary. Decisions of the JESB are made by consensus and are disseminated in decision
memoranda provided to the F-35 Lightning II Program Office for action.
The ALAC is a multi-Service, international 1-Star/2-Star forum established by the F-35 PEO
to provide updates on the JSF support & training solutions, business and implementation
strategy, and other technical matters necessary to assure the successful realization of the
Service’s JSF sustainment requirements.
The Sustainment Advisory Group (SAG) provides the War fighter and F-35 PEO with
oversight of lifecycle sustainment and delivery of validated ORD requirements.
Management of the PBL construct is based on the PSM Guidebook of the US DOD (2011).
The Program Manager’s role is assigned to the JSFPO PEO and the Product Support
Manager’s role to the Director of Logistics. Team JSF (Prime contractor is LMAero) and P&W
are the two Product Support Integrators (PSI).
Figure F.8 Product Support Business Model [DOD, 2011]
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Annex F F-35 System Definition and Characteristics Data
Table F.1 F-35 System Definition data
Attributes Status/Remarks
General Description ORD/JCS/Design Documents
Functional Decomposition Design Documentation
Functional Interfaces and Criteria JCS
Environment Conditions ORD and JCS
Maintenance Plan JCS, On-condition, PHM, JTD (MSD)
System Adjustments (modifications) Change Management (CR, MVR, ECP,
TCTD), Follow-on development, CCDD
System Differences MVR, PSCN, differences JCS
Table F.2 F-35 System characteristics data
Attributes Status/Remarks
Performance Characteristics JCS, JTD (FSD)
Physical Characteristics JTD
Effectiveness Requirements PBA, MEFL, JCS
Certification Requirements TACC, Integration reports
Table G.3 F-35 Installation definition data
Attributes Status/Remarks
General Description JTD
Functional Decomposition Design Documentation
Functional Interfaces and Criteria JCS and JTD
Environment Conditions JCS
Maintenance Plan JTD (MSD)
System Adjustments (modifications) Change Management (CR, MVR, ECP,
TCTD), Follow-on development, CCDD
System Differences MVR, AR’s
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Table F.4 F-35 Installation characteristic data
Attributes Status/Remarks
Performance Characteristics JTD
Physical Characteristics Design Documentation
Capability JCS and JTD
Reliability Design Documentation, JCS, SPMS
Availability Design Documentation, JCS, SPMS
Testability JTD
Maintainability JTD, MTA, FMECA
Safety and Risks JTD, Certification Reports
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Annex G Stakeholder Assessment Questionnaire
G.1 Stakeholder Assessment Set up
G.2 Stakeholder Assessment Presentation
G.3 Stakeholder Assessment dry-run results
G.4 Stakeholder Assessment Individual Results
G.1 Stakeholder Assessment Set up
The preparation of a questionnaire requires the following steps [University of Leeds, 2012]:
1) Objective of the questionnaire
2) Target population
3) Develop question set
4) Run pilot questionnaire
5) Run main questionnaire
6) Analyze the data
Objective
As discussed previously the objective of the assessment is getting insight in the perspective
of stakeholders on the conceptual WSM and WSD design. The assessment results are used
to adjust the WSM and WSD design, to provide insight in the constraints of the design and to
identify possible problem areas for the implementation phase.
Approach
Verschuren and Doorewaard (2004) identify two possibilities to gather stakeholder
information: interview and questionnaire. Both have advantages and disadvantages. An
interview with a stakeholder can provide in-depth information regarding the perspective of
that stakeholder on the design. However the interview method is time consuming and the
analysis of the information is difficult [Verschuren and Doorewaard, 2004]. Gathering the
information through a questionnaire is less time consuming and the analysis of data can be
more effective. The questionnaire method has its limitations in getting in-depth insight in the
perspective of the stakeholders because it lacks the ability to ask deeper question on a
certain subjects if this is required [Verschuren and Doorewaard, 2004]. This research uses a
mixed approach.
Target population
The target populations for the questionnaire are the stakeholders in the conceptual WSM and
WSD design. For stakeholders to provide a relevant perspective requires a certain level of
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knowledge in WSM, PBL, the NL MOD and the F-35 program. A previously conducted
stakeholder analysis was executed to gather information on the perspective of stakeholders,
throughout the NL MOD organization, on the impact of the F-35 program on their
organization [NL DMO/DP&V, 2010]. It was concluded that there was a gap in knowledge on
PBL and the F-35 program to indicate the effects it might have on certain NL MOD
organizational elements. The selection of stakeholders is made from the actors involved in
WSM. Stakeholders of the basic NL MOD WSM triangle are selected (operator, maintainer
and system manager). Furthermore actors in the proposed WSM approach are selected as
stakeholders: financial control, contracts and information management. In addition TNO and
NLR are requested to participate in the assessment to provide an outside (NL MOD)
perspective. Because it is a first assessment of the design the sample size is limited. The
required knowledge of stakeholders limits the selection of stakeholders and the required
sample size and subsequently the number of respondents. However selecting respondents
with sufficient relevant knowledge increases the quality of the questionnaire results.
Question Set
To gain insight in the perspective of the stakeholder the questions are open-ended. The
basis of the questionnaire is a SWOT analysis of the WSM and WSD design. The
stakeholder assessment is supported with a briefing on the proposed WSM and WSD design
as described in paragraph 5.1 through 5.5. In addition it provides background information on
the design including the improvement factors as defined in paragraph 4.3.
Pilot Survey
To test the stakeholder assessment approach a dry-run of the assessment is conducted with
two stakeholders. The results of the dry-run are described in annex H.3. The stakeholder
assessment starts with the background of the research. Before the presentation of the WSM
and WSD design starts, the stakeholder assessment form is presented to the stakeholder
making it possible for the stakeholder to gather feedback on the design. At the end of the
presentation the stakeholder is requested to provide feedback in the design by answering the
questions (SWOT analysis). If required (feedback in Dutch) the completed stakeholder
assessment form is reviewed by the stakeholder (member-checking).
The dry-run concluded that the assessment provides the required insight in the perspective
of stakeholders on the design. The results of the dry-run assessments are included in the
stakeholder assessment.
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Main Survey
The main survey the following stakeholders:
Operations LtCol M. Hendriksma
Sustainment LtCol D. Trouerbach
MTCH LtCol M. van den Bersselaar (dry-run)
Financial Control LtCol T. Gijzen
External Mr. A. de Jong
Analysis
The results of the stakeholder assessment are summarized. These results are analyzed to
determine the impact on the proposed WSM and WSD design.
Questionnaire limitations
The use of a questionnaire has its limitations. First it is difficult to gain an in-depth
perspective of stakeholders. This is partly countered by using open-ended questions.
However a questionnaire does not provide the in-depth information that an interview does.
Further refinement of the design requires more in-depth participation of specific stakeholders
and is proposed as further research. Furthermore the sample size is limited because of the
required knowledge of stakeholders as described previously.
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G.2 Stakeholder Assessment Presentation
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G.3 Stakeholder Assessment dry-run results
Stakeholder Assessment (v1.0)
Name: LtCol M. van den Bersselaar
Date interview: 27-3-2012 (dry-run interview)
Functions in WSM: Military Type Certificate Holder (MTCH)
WSM Design
What are in your opinion the strengths of the propo sed WSM design?
It is a clear WSM approach within a new `full` PBL support concept. It also shows very
clearly the needed WSM organization. (F-35 NL WSM construct versus the F-35
sustainment management construct)
What are in your opinion the weaknesses of the prop osed WSM design?
Limited influence of the WSM organization on the human resources policy and budget.
Coordination with F-35 Sustainment organization (JSFPO and ALGS) due to time
difference (USA, NL)
What are in your opinion the opportunities related to the proposed WSM design?
New design supports restructuring of the NL sustainment management organization and
business operations
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What are in your opini on the threats related to the proposed WSM design?
Upcoming reduction in personnel requires outsourcing of WSM tasks which will lead to
additional costs. This affects the required budgets for sustaining the weapon system.
US policy dictates that every 5 yrs. the effectiveness of the F-35 sustainment concept is
evaluated with a Business Case Analysis (BCA). This could lead to a change in the F-35
sustainment concept which in turn effects the NL WSM organization.
What additional comments do you have on the proposed WSM design?
Very useful WSM design to support manpower study on F-16 replacement acquisition
process (D-DMP).
Recommend to perform similar study for QA-organization within “Full” PBL support
concept
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WSD Design
What are in your opinion the strengths of the proposed WSD design?
What are in your opinion the weaknesses of the prop osed WSD design?
Limited influence of the WSM organization on the human resources policy and budget.
Coordination with F-35 Sustainment organization (JSFPO and ALGS) due to time
difference (USA, NL)
What are in your opinion the opportunities related to the proposed WSD design?
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Dry-run interview:
Is in your opinion the content of the briefing clear enough to obtain a clear understanding of the
proposed WSM and WSD design?
The briefing provides the required insight in the proposed WSM and WSD design. The following
suggestions are made to further clarify the designs;
- add a slide which explains the pre-conditions for both designs (e.g. F-35 sustainment
program of record,
- increase visibility of figures in different slides,
- further explain the function of ALIS and SAP with regards to WSM information,
- if possible, verbally explain the differences with the existing organization
- add definitions for different terms (e.g. WSM, cost-effectiveness).
Do the questions, based on the SWOT analysis, are sufficient to provide feedback on the proposed
design solutions?
Yes, the SWOT questions are sufficient to provide my insights on the proposed designs.
What are in your opinion the threats related to the proposed WSD design?
Approval of the F-35 MTCH organization by the NL MAA.
What additional comments d o you have on the proposed WSD design?
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G.4 Stakeholder Assessment Individual Results
Name: Mr. Arjan de Jong
Date interview: 30-3-2012
Functions in WSM: external
WSM Design
What are in your opinion the strengths of the propo sed WSM design?
The matrix organization, extending over multiple weapon systems is an interesting concept
that will make it easier for the MOD to act ”smart”. It creates the opportunity to standardize
policies, processes, skills and experience. It also connects experts from different parts of
the organization and creates economies of scale and scope. The multi-disciplinary
approach towards WSM is effective, in particular in combination with procurement and
financial control.
The use of PBAs is a structurally sound solution to manage suppliers, under in specific
circumstances. Involvement in the management of PBAs, especially in the procurement
coalition (JSFPO), may be particularly relevant to control costs and performance.
What are in your opinion the weaknesses of the prop osed WSM design?
The WSM design does not separate the responsibilities of the asset owner and user. With
the user in control, ownership (asset value retention) will be neglected.
If the structure on slide 11 depicts the different layers of WSM, these clusters seem to be
missing in the organization chart on slide 14. It raises concerns about the responsibility of
the different WSM elements, the hierarchy within the WSM team, and its ability to make
decisions.
The WSM design is not very clear about the relationships between the different external
organizations. Insight in contract relationships (i.e. interorganizational boundaries) may
clarify this.
What are in your opinion the opportunities related to the proposed WSM design?
The WSM design provides the opportunity to maximize the ”smart” approach, provided that
the P policies are aligned and personnel have a career path through the WSM team.
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What are in your opinion the threats related to the prop osed WSM design?
The WSM structure seems to lack measures to facilitate continuous improvement and to
handle disruptive events. The WSM team needs dedicated functions to anticipate on short,
medium and long term improvements and disruptive events. Additional product functional
elements may include planning, risk and quality management.
What additional comments do you have on the propose d WSM design?
LCM seems to focus cost allocation by system function. Further research into methods to
substantiate lifecycle cost analyses, the LCM model should be compared against
alternative approaches; consider for example workflow methods. A workflow method has
the advantage that it models activities and resource allocations.
A RACI chart may further align and clarify responsibilities within the WSM team.
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WSD Design
What are in your opinion the strengths of the propo sed WSD design?
Certification by validation and reliance on incumbent design / certification organizations
seems effective.
What are in your opinion the weaknesses of the prop osed WSD design?
The separation of tasks between LCSO and ASC/EN does not look efficient, it splits the
airworthiness responsibilities over two organizations.
Despite the reliance on other entities (i.e. JSFPO, LSCO and ASC/EN, the WSD
organization looks extensive.
What are in your opinion the opportunities related to the proposed WSD design?
The WSD design offers an opportunity to do more with fewer resources, benefitting from
the incumbent design / certification organizations.
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What are in your opinion the threats related to the proposed WSD design?
Some WSD tasks, such as maintenance program development, reliability and
effectiveness of the program are under the responsibility of the user as maintenance
manager, and not the WSD. This may reduce the effectiveness of the WSD team. Maybe
the user should be included in the WSD design.
What additional comments do you have on the propose d WSD design?
A standardized total aviation system (for example, as envisioned by MAWA), supported
and implemented by all partners, may further reduce WSD costs.
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Name: LtCol M. Hendriksma
Date interview: 13-4-2012
Functions in WSM: Operator
WSM Design
What are in your opinion the strengths of the propo sed WSM design?
The structuring of WSM responsibilities and authority.
The matrix organization structure as proposed for WSM.
The control of weapon system effectiveness and costs in the PBL environment.
The interface and use of the JSFPO organization to manage F-35 sustainment for the NL
fleet.
What are in your opinion the weaknesses of the prop osed WSM design ?
The flexibility of the design with regards to the customer/supplier relationship between the
DO and DML, and flexibility with regards to controlling sustainment in the PBL
environment.
What are in your opinion the opportunities related to the proposed W SM design?
Structuring of WSM responsibility and the matrix organization structure as an input to
future organization change process.
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What are in your opinion the threats related to the proposed WSM design?
Supportability of the proposed WSM design within the NL DMO (acceptability of the WSM
role for the DML).
Required organization culture to support WSM design and support the change process.
What additional comments do you have on the propose d WSM design?
Insufficient influence of the WSM organization on the DIP and P budgets in relation to
WSM.
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WSD Design
What are in your opinion the strengths of the propo sed WSD design?
The interface and use of the USAF organization to manage the F-35 MTC the NL fleet.
What are in your opinion the weaknesses of the prop osed WS D design?
The WSD does not take into account the Air System (including the training system)
perspective of the JSF program.
What are in your opinion the opportunities related to the proposed WSD design?
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What are in your opinion the threats related to the proposed WSD design?
What additional comments do you have on the propose d WSD design?
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Name: LtCol D. Trouerbach
Date interview: 28-3-2012
Functions in WSM: Sustainment
WSM Design
What are in your opinion the strengths of the propo sed WSM design?
Clear visibility of WSM tasks and responsibilities.
Slide 13 (relation between the positions in the Netherlands and in the US)
What are in your opinion the weaknesses of the prop osed WSM design?
Unique solution for the F-35. No synergy with the other CAT A weapon platforms.
Availability/releasability of WSM information (NDP issues)
Accountable for the WSM tasks (in total)
What are in your opinion the opportunities related to the proposed WSM design?
Better insight in the WSM control elements
Better focus on WSM aspects.
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What are in your opinion the threats related to the proposed WSM design?
Ability of the DMO/Air Force to stay a smart customer in the future
Current discussion between the Air Force and DMO regarding WSM responsibility. I don’t belief
that the DMO will accept the transfer of WSM responsibilities and authority to the OPCO. I am not
sure if the OPCO aspires this?
The reduction of defense personnel and NF (Numerus Fixus) could be a treat for the WSM design
ambition.
The outcome of the JSF Business Case by AT KEARNY (possible transfer of SCM responsibilities
from the PSI to the US services)
What additional comments do you have on the propose d WSM design?
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WSD Design
What are in your opinion the strengths of the propo sed WSD design?
What are in your opinion the weaknesses of the prop osed WSD design?
What are in your opinion the opportunitie s related to the proposed WSD design?
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What are in your opinion the threats related to the proposed WSD design?
What additional comments do you have on the propose d WSD design?
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Name: LtCol T. Gijzen
Date interview: 11-4-2012
Functions in WSM: Financial Control
WSM Design
What are in your opinion the strengths of the propo sed WSM design?
Tailor-made to the F-35 related PBL concept.
Takes into account the organizational changes the NLD MOD is facing.
What are in your opinion the weaknesses of the prop osed WSM design?
It is not clear how (long term) flow-on development is dealt with.
The matrix layout of the WSM team might be hard to handle in an organization that has
the tendency to organize its departments identically.
It is not clear how the operator provided logistic activities are controlled/managed from a
WSM perspective.
What are in your op inion the opportunities related to the proposed WSM design?
The matrix layout of the WSM team provides flexibility and an efficient use of (rare) core
competences.
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What are in your opinion the threats related to the proposed WSM design?
The WSM team reports to the DML, however some of the team members have different
chains of command. This might lead to conflicts of interest or priority issues.
What additional comments do you have on the propose d WSM design?
For the F-35 there could be differences in managing the weapon system between the F-35
fleet in The Netherlands versus the aircraft in the pooled training environment in a Pilot
Training Center (PTC).
Fuel is not taken into account in the cost section of the design.
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WSD Design
What are in your opinion the str engths of the proposed WSD design?
What are in your opinion the weaknesses of the prop osed WSD design?
The functional relationships with other functions like operations, contracts, finance are
missing.
What are in your opinion the opportunities related to the proposed WSD design?
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What are in your opinion the threats related to the proposed WSD design?
What additional comments do you have on the propose d WSD design?
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